Post
Topic
Board Wallet software
Re: Hot vs Cold Wallet Cryptocurrency
by
Pmalek
on 09/06/2025, 08:41:02 UTC
My question is, this is how it works similar to a hardware wallet, we make transactions then need permission on the device that stores the private key to sign the transaction and then broadcast it again on the online device.

If there is a method like this, why do most people buy hardware wallets, are they easier to use or safer than the methods above, or do they just look like they have a lot of bitcoin assets if they have a hardware wallet?  Grin in my country, many influencers suggest buying a hardware wallet because of the security issues of local exchanges, and those influencers suggest not to store assets of more than 1btc on the exchange and if it is still below 1 btc it is okay to still store it on the exchange, as written above (not how many assets are stored but how long the assets are stored in the coldwallet) I agree with this.
Hardware wallets present a compromise between ease of use and security.

The easiest way to use bitcoin would be to hold it on an exchange where all you need is an email address and password to log in. You don't have to make backups of your seed. This is also the least secure way of storing your digital assets. It's not recommended and you don't own the keys.
Hot wallets (software and mobile) are next. Most of them are non-custodial, meaning you own the keys but they are still stored on an internet-connected computer.
Properly airgapped setups are the safest but also more complicated to use than other methods. You need two separate devices: one for your private keys that must always be offline and one online device for broadcasting.
Hardware wallets allow you to store your keys on a specific device and away from your computer. They also offer a second verification method when you make transactions. You create everything on the software wallet (hot wallet) and then doublecheck all your entries on the screen of your hardware wallet. If the software wallet was compromised, you would notice something is off on the screen of you hardware wallet.

Hardware wallets are popular because they offer levels of simplicity and security that are enough for most people.