The collapse of FTX and the scandals around its founder have dealta blow to the reputation of cryptocurrencies. Their prices have recentlyplummeted, and their market valuations are now at a quarter of their peakvalue. Investors and crypto holders are right to worry, but they should knowtwo important things.
First, fraud has existed long before digital tokens, that’s for sure. The collapse of FTX hasmore to do with human greed and immorality, rather than the nature ofcryptocurrencies themselves. Second, there are different types of cryptowallets that can isolate investors from episodes of corruption like this andprotect them, so you can buy a cryptocurrency and feel safe.
We at VoltCoins care about your security, so here we give you alternativesto keep your money safe. This article will focus on types of crypto wallets andtry to help you choose the right wallet, so you can keep your cryptocurrencies safe from the reach offraudsters. Note that we at VoltCoins do not endorse or recommend onewallet or another. We hope to bring you a wide variety of choices, so you candecide what is most suitable for you.
Hot vs coldcrypto wallets
Crypto wallets are simply a place to store your holdings ofcrypto. Usually, each wallet contains a public key that you give toothers to allow them to send tokens to you, and a private key, which is like apassword and enables you to access your cryptocurrencies. There are mainly twodifferent types of wallets:
hat it is connected to the internet. In other words, it is virtual.This gives it advantages and disadvantages. The main advantage with this typeof wallet is that it enables you to carry out transactions much faster, giventhat it is already connected to the overall system. The downside, however, isthat this level of connectivity gives room forhackers to access sensitive information and perhaps steal your money.
You can buy a cryptocurrency on VoltCoins andstore it on your hot wallet. The wallet can be used on mobile phones as well ascomputers, and it is always online to facilitate transactions. Some prominenthot wallet providers are MetaMask, Coinbase, and Mycelium, but there are plentyof other options out there.
Cold wallets are physical rather than virtual. That is, a coldwallet is usually a hard drive or a flash memory, or something similar. Thosewallets are disconnected from the internet, so they are a lot more secure thantheir hot peers.
Crypto owners usually store the majority of their holdings in coldwallets to protect their tokens. They movethose tokens, or a part of them, to hot wallets when they want to carry outtransactions. In other words, cold wallets aresuitable if you want to hold your crypto tokens for the long term and not tosell or buy a cryptocurrency frequently. Ifthat is your strategy, then they provide the best combination of security andconvenience, as your private key is stored offline so no one can access it.
The only risk is that if you lose the hard drive on which your keyis stored, you lose access to your tokens. That, however, can be avoided with a bit ofcaution. Remember, you can buy a cryptocurrency on VoltCoins and store it on your cold wallet.
Both hot and cold wallets have advantages and disadvantages, andwhile cold wallets are more secure than hot wallets, both protect you frompotential risks associated with exchanges, and you can buy a cryptocurrency on VoltCoins and add it to any of those wallets.