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Type of Wallets
Hot Wallets & Cold Wallets
Hot wallets are online wallets that are connected to the internet. They are software-based applications that are convenient and easy to use, but also more susceptible to hacking and security breaches. Examples of hot wallets include Metamask, Nami, and Flint.
Cold wallets, on the other hand, are offline wallets that are not connected to the internet and can either be in the form of software or hardware. They are more secure than hot wallets because they are not susceptible to online attacks.
- Hardware (HD) wallets are USB-like devices which store and encrypt your wallet on a physical device. They are very secure, and the most resistant to hacks. Examples include HD wallets like Ledger and Trezor.
- Cold software wallets are called air-gapped wallets, and while offline, your wallet is still stored on a computer. If physically hacked, you can lose your assets.
Pros & Cons of Hot & Cold Wallets. Source: crypto.com/university