How to Store Crypto Safely: Hot vs Cold Wallets
Buying crypto is the easy part. Keeping it safe is where most beginners make mistakes. The first decision is where your coins will live.
Exchange accounts
When you leave coins on an exchange, the exchange holds the keys for you. It is convenient for trading, but you rely on the company's security and you cannot move coins if the service has problems.
Hot wallets
A hot wallet is an app on your phone or computer that is connected to the internet. You hold the keys yourself, and it is quick to use for everyday sending and swapping. The downside is that malware or a phishing attack on your device can put your funds at risk.
Cold wallets
A cold wallet, usually a hardware wallet, keeps your private keys on a small offline device. Transactions are signed on the device and your keys never touch the internet-connected computer. This is widely considered the safest option for larger amounts held long term.
A simple setup that works
- Keep a small amount for spending in a hot wallet.
- Move the rest to a hardware wallet.
- Write your recovery phrase on paper, never in a photo, email or cloud note.
- Store that paper somewhere safe, ideally in two separate places.
- Test with a small transfer before moving a large amount.
Rules that protect you
- Nobody legitimate will ever ask for your recovery phrase.
- Buy hardware wallets only from the manufacturer or an authorised seller.
- Double-check every address before you press send.
Browse our Offline Wallets section to compare popular hardware wallets.
This article is for information only and is not financial advice.
