Cold Wallet vs. Hot Wallet (Hardware & Software Wallets)

--- by D. Petkovski ---

I keep getting questions whether it’s worth it to buy BitBox02 or Keystone 3 Pro if they already use MetaMask/Exodus/TrustWallet and have written the seed phrase on paper.

Yes, it’s absolutely worth it.

In this post, I’ll explain a few benefits and protections you gain with hardware wallets that hot wallets don’t offer.

But first, the main value proposition that both these options share is self-custody.

That means that you have complete ownership and control over your funds. No entity can freeze/control/censor your account or transactions.

Of course, this holds true as long as you don’t expose your seed phrase (12 or 24 words) to a malicious third party, also known as a “scammer”.

Why Hardware Wallets are Superior

There is a single reason for this:

Your seed phrase will never be on a device connected to the internet.

This means:

No vulnerability to spyware
No keyloggers having access
No exposure to clipboard malware
No trace of that sequence of words ever existing
No risks of scam websites/apps asking you to enter it
No exposure to theft (if your phone or laptop get stolen)
No exposure to the hot wallets’ apps that generate seed phrases
No risk of your seed phrase being sent somewhere over the internet
No risk of whoever has access to your device misusing all your funds
No risk of viruses targeting browser extensions that can read your info
No OS-level exploits can extract data from common wallets/text files containing BIP-39 data

In other words, the only thing you should do is make sure that you never share the seed phrase anywhere or with anyone.

The extra layer of security offered by hardware wallets is that your seed phrase will never be seen by anyone else.

You don’t have this protection with hot wallets as the private key is generated on your PC by default. And even if you delete the wallet and never reveal the seed phrase again, there is a permanent digital footprint of your keys. It doesn’t matter how improbable it is that someone will get to them, we’re discussing the technical possibility.

Hardware wallets solve this and everything else that software wallets also do.

TLDR: your keys are offline

🛡️ Secure your assets permanently – master self custody and hardware wallets 🔐

Self Custody Coaching

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D. Petkovski

📓 The Author Husband & Father
Software Engineer StrengthCentric
₿itcoin Hodler Long-Term Investor
🌍 Everything Enthusiast 🔥 Optimist

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Cold Wallet vs. Hot Wallet (Hardware & Software Wallets)

Why Hardware Wallets are Superior

TLDR: your keys are offline

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