The term 'wallet' in crypto refers to a place where a cryptocurrency is stored. The wallet contains a public key (wallet address) which is an address in alphanumeric format to send or receive cryptocurrency to other users and private keys (private keys) to function as a password that can give access to the owner of the wallet itself.
There are two different types of wallets that need to be known, namely hot wallets and cold wallets.
Hot wallet is a cryptocurrency storage wallet that does not have a physical form, but is digital in nature. Therefore, hot wallets are easy to use because you only need an internet network to make cryptocurrency transactions.
Although hot wallets are easy to use, they are more at risk of being targeted by hackers because they are easily accessible online. In addition, most hot wallets are provided for free, but there are also paid ones.
Ease of transaction process of cryptocurrency to the exchanger platform for trading or converting into fiat currency is also one of the reasons why hot wallets are popular.
A cold wallet is a physical wallet shaped like a USB drive that allows offline storage of cryptocurrency.
Cold wallets have advantages in terms of security because they are not exposed to hacking attacks and are easily stored in a trusted place. However, the cost of a cold wallet is more expensive for users to buy than a hot wallet which is more cost-effective.
Cold wallets have a more complicated usage because it requires a device such as a computer to transfer a certain amount of cryptocurrency in the cold wallet to the hot wallet first before being able to use it.
