Back to: Wallets & Security 101
A hot wallet lives online (phone app, browser extension). A cold wallet lives offline (hardware device, paper). You don’t pick one — you run a *system* with both, split by purpose and amount.
The standard setup (used by careful holders everywhere)
– Hot wallet — “checking account.” Small balance for daily use, dApps, small trades. Accept the risk; limit the damage. – Cold wallet — “savings vault.” Everything else, offline, touched rarely. A hardware wallet ($50–200) is the default recommendation. – Exchange — “on-ramp only.” Buy there, withdraw promptly. Never store long-term.
Choosing a hot wallet
Pick one with: open-source code, a large user base, no custodial control (you hold the seed phrase), and hardware-wallet support for later. Write down the seed phrase *before* funding it — that order matters.
Choosing a hardware wallet
The two established makers have decade-long track records; buy only from the manufacturer, never secondhand or from marketplaces (tampered devices exist). During setup, the device generates the seed phrase on its own screen — if any website shows you the words instead, it’s a scam.
The amounts rule of thumb
– Under ~$500 total: hot wallet + good backup hygiene is reasonable. – Above that: get hardware. The device costs less than one mistake. – Whatever the amount: never keep on an exchange what you can’t afford to lose to someone else’s bankruptcy.
Two wallets, two jobs. Money you move vs money you keep — different tools,
> different risks, different habits.
Next lesson: setting up your first wallet, step by step.