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What is a cold wallet? What is the difference of it from a hot wallet?

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To put it simply, cold wallet is a wallet that is not connected to the internet while hot wallet is. They each have their different purposes but generally it is advisable to store your crypto in a cold wallet if you are not planning to trade it often as that is a safer option compared to storing it on a hot wallet. Exchange wallet is typically a hot wallet. Basically, a hot wallet is analogous to a current account while cold wallet is similar to a saving account.

Storing your funds in a cold wallet prevent you from being hacked but you will have to be responsible for the physical storage of your fund. Note that saving your fund in a cold wallet doesn’t mean that your fund is automatically 100% safe. You might lose access to your funds due to physical damage, malfunction or misplacement of the storage medium.

Types of cold storage includes:

  1. Paper wallet
  2. Hardware wallet (e.g. TrezorLedger Nano S and KeepKey.)
  3. Data storage medium like a USB or Hardrive
  4. A bearer instrument such as a physical Bitcoin


If you would like to know more about the types and categories of wallet, check this article below:

Bitcoin Wallet for Beginners: Everything You Need to Know

Edited answer

I guess it simply means wallet that doesn’t connect itself to the internet. 🙂

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