Hot Wallets
Sup! Friends, how are you all, I trust you're all keeping well. Good to have you around again. Of course am here to dish it the way you've always loved it. Our discussion is actually on storage, I mean wallets and so far we have considered the cold storage even with it pros and cons.
I deemed it fit to touch on Hot wallet as well just for the sake of balance and then maybe I would be opportuned to compare and contrast before I finally wrap it up for this discussion on wallet. So let get into it friends...
Hot wallet are software or app based wallet usually installed on a PC or mobile device for the purpose of storing our cryptos and transacting with it as well. It is secured with a password which you set by yourself and this equally gives only you the access to it.
The reason why this wallet are called hot wallet is because it's always connected to the internet. In fact your keys and seed phrase are stored on these wallets which are always connected. It won't be out of place to say that these wallets are designed in such a way that your keys and seed/recovery phrase are generated and are also backed up online which makes one really unsure of it safety...
Hot wallet is that very wallets that comes to mind when you're just starting out in the crypto world. You definitely need to set up a wallet which would function as storage and also help with transactions. You know it quite easy to get and also free, yeah! I mean every free.
This is unlike most hard wallet that will require that you pay a certain amount to get. Some ranging from $50 - $200. How would a novice who just hopped into this space afford that for a start in the name of safety/security....smiles. However safety measures need to be put in place when using hot wallet.
For the fact that one cannot afford a cold storage shouldn't make us shy away from the very fact that hot wallet ain't that safe since it's perpetually connect to the internet and contains very sensitive information such as the seed/recovery phrase and private key. Let's explore how one can play safe using an hot wallet.
• Always Store A Small Portion of your assets on hot wallets
When it comes to using hot wallet, adequate care must be taken. You do not use hot wallet for long term storage, neither do you use them to store a very large amount of Crypto. The wallet is porous and can be hacked when you least expect.
If you follow this principle you would sure save your self from suffering huge loss if there is an unforseen event of hacking into your wallet. In a nutshell, put a smaller portions of your holding in this kind of wallet and then store the remaining part using cold storage.
• Exchange/Swap Your Cryptocurrencies
Here is another sure tip you can consider. You can decide to exchange your Cryptos for fiat especially when you have them in large quantity in your hot wallet.
Exchanging them for your country's currency and then moving them to your local bank is key.
It would save you from a lot of headache and reduce your loss when it gets hacked by these players.
I understand that this particular point might be a bit difficult and highly risky for Nigerians, as there is a ban on using the traditional bank for crypto related activities. However one could explore the other options being discussed. So if you're not a Nigerian, you can take advantage of this very point.
• Store asset on Exchange
You could also take advantage of the storage infrastructures put in place by exchanges, its more secured than having it in a random hot wallet. These exchange are usually referred to as hot wallet providers and they do their best to secure your asset, however this is a custodial kind of activity because your assets is now in their custody.
Also bear in mind that when these exchanges suffer loss as a result of hacking and other related activities, you would also share of the loss because you would be affected as well but as it stands today, it has become so rare to see these exchanges suffer loss due to their heightened security layers systems.
These are few of the tips I would love to share with you, I hope you found it useful, am sure you could still find more if you take your time to looks for more, that is if you're really in need of more security tip for hot wallets.
There you go friends.I would love to wrap it up at this juncture. I want to believe you've gotten so much from this piece. As my usual custom is, I would always encourage that you DYOR to be sure of every financial step you would want to take as I won't be liable for any form of loss encountered by you.
Feel free to share with me your thoughts in the comment section. Thanks for your time once again. Gracias!
Disclaimer: This post is made as an education and not investment advice. Digital asset prices are subject to change. All forms of crypto investment have a high risk. I am not a financial advisor, before jumping to any conclusions in this matter please do your own research and consult a financial advisor.
Regards
@lhorgic♥️
https://x.com/lhorgic1/status/1740005948121555374?s=20
Dear @lhorgic ,
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This is an interesting post you have shared on hot wallets.
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