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Wallet Types: Pros & Cons

Understanding the different types of wallets is fundamental to managing your assets securely. Here, we explore the key wallet types, their advantages, and potential risks.

a. Hot Wallets (e.g., MetaMask, Phantom):​

  • Pros: Easy access, quick transactions, convenient for frequent users

  • Cons: Always connected to the internet, making them more vulnerable to hacks and phishing attacks

  • Best Practices: Use for smaller, everyday balances; enable two-factor authentication (2FA); regularly update software

b. Cold Wallets (e.g., Ledger, Trezor):​

  • Pros: Offline storage, immune to online attacks, ideal for long-term holding and large amounts

  • Cons: Requires hardware device, can be lost or damaged, slightly less convenient for frequent transactions

  • Best Practices: Keep multiple backups of recovery phrases, store devices in secure locations, verify device authenticity

c. Paper Wallets:​

  • Pros: Completely offline, no digital exposure

  • Cons: Prone to physical damage or loss, not user-friendly for regular transactions

  • Best Practices: Laminate or securely store paper wallets; avoid sharing or photocopying