As we have seen in the section Wallets: what they are and how to choose them. hot wallets are designed for storing cryptocurrencies that are used in daily transactions and regular purchases. Text editor Usually installed on mobile devices and sometimes on notebooks, it is recommended to keep only small amounts of cryptocurrencies in these wallets for security reasons.
Operation and Safety
In hot wallets, the private key is stored online and managed by a third party, accessible through an application. This means that even if we log into our accounts using personal passwords, the application provider can potentially have access to our currencies. They are ideal for everyday transactions, but not recommended for storing large amounts of cryptoassets.
Main Features
The main feature of hot wallets is their agility, operating without an intermediary device, which facilitates fast and direct transactions. To maximize security, it is recommended to install additional tools such as “Google Authenticator“.
Differences between Hot Wallets and “Bitcoin Banks”.
To understand the differences between Bitcoin hot wallets and Bitcoin banks, it is first essential to understand the context of cryptocurrency and security. There are several reliable applications where we can buy and store cryptocurrencies. However, in recent years, some governments have begun to require personal information for all transactions, usually for tax reasons.
Hot Wallets vs. Bitcoin Banks
Hot wallets, which operate through mobile applications or software on computers, allow users to manage and transact cryptocurrencies quickly and directly. Unlike Bitcoin banks, hot wallets typically do not require personal information, offering greater anonymity. This is in contrast to Bitcoin banks, such as Brokers, Exchanges or Gateway, which not only process cryptocurrencies but also fiat currencies and often require personal identification to comply with financial regulations.
Privacy and Anonymity
One of the characteristics of hot wallets is their ability to maintain user anonymity, in contrast to Bitcoin banks which, by their regulated nature, must ensure transparency and identify their customers.
Security
In terms of security, both hot wallets and Bitcoin banks strive to offer protection against theft and fraud. Bitcoin banks, in particular, are constantly investing in improving their security systems. However, no platform can guarantee 100% security because they are connected and exposed to the Internet.
Needs-Based Personal Choice
Ultimately, the decision to use a hot wallet, a cold wallet or a Bitcoin bank depends on individual needs and the level of security each user requires. Each option has its advantages and it is important that users carefully evaluate which option best aligns with their usage habits and security requirements.
Recommended Wallets for Notebooks and Cell Phones
For Notebooks: Electrum is an excellent choice. Launched in 2011, it is one of the most widely used applications for notebooks or PCs. Install Electrum and the private and public keys will be stored directly on your device, offering a good level of security.
For Mobile Phones: I recommend the Edge wallet. With an intuitive user interface and a high degree of internal security, Edge is ideal for those looking for a secure and convenient solution to manage cryptocurrencies from their mobile device.
Conclusion
The choice between cold wallets, hot wallets and Bitcoin banks will depend on the individual needs and security threshold of each user. It is crucial to select a wallet that aligns with your usage habits and offers the necessary security measures to protect your digital assets.