🔥 Hot Wallets: How Do They Work?
✌ Hot wallets come in two main types: custodial and non-custodial. Each offers its own features and levels of control over your crypto assets. Let’s explore each. 😏
👛 Custodial vs. Non-Custodial Hot Wallets
🟢 Custodial Wallets:
With custodial wallets, a third party (e.g., exchanges like Bybit, Binance, Coinbase) manages your private keys. This setup is user-friendly, particularly for beginners, since there’s no need to worry about securing keys. However, you don’t have full control over assets, and if the exchange is hacked, as in the infamous Mt.Gox breach where over 850,000 $BTC were lost, you could lose your funds.
💎 An example of a custodial wallet is Telegram Wallet, which sparked a "boom" by integrating crypto transactions directly into the messenger, simplifying crypto management for a broad audience and allowing users to send and receive assets like $TON directly in Telegram ✉
🟢 Non-Custodial Wallets:
Non-custodial wallets let users control their own private keys, which increases security since only the user has access to their funds. However, losing the private keys means there’s no way to regain access.
🔝 Popular Non-Custodial Wallets:
1⃣ MetaMask — 30 million active users
2️⃣ Trust Wallet — 10 million active users
3️⃣ Atomic Wallet — 5 million active users
4️⃣ Exodus — 2 million active users
📌 Summary:
Hot wallets are great for frequent use and fast transactions but can be vulnerable to attacks. Choosing between custodial and non-custodial depends on your need for control and security: custodial wallets are beginner-friendly, while non-custodial wallets suit those who value full control over assets.
Which wallet do you use? I’m answering all your comments below! 👇
Hot wallets are crypto wallets that are constantly connected to the internet, making them convenient for fast transactions and frequent usage. They allow users to send and receive crypto easily, often providing access to a range of blockchains and decentralized applications (dApps). However, this constant internet connection makes hot wallets vulnerable to hacking and phishing.
✌ Hot wallets come in two main types: custodial and non-custodial. Each offers its own features and levels of control over your crypto assets. Let’s explore each. 😏
👛 Custodial vs. Non-Custodial Hot Wallets
🟢 Custodial Wallets:
With custodial wallets, a third party (e.g., exchanges like Bybit, Binance, Coinbase) manages your private keys. This setup is user-friendly, particularly for beginners, since there’s no need to worry about securing keys. However, you don’t have full control over assets, and if the exchange is hacked, as in the infamous Mt.Gox breach where over 850,000 $BTC were lost, you could lose your funds.
💎 An example of a custodial wallet is Telegram Wallet, which sparked a "boom" by integrating crypto transactions directly into the messenger, simplifying crypto management for a broad audience and allowing users to send and receive assets like $TON directly in Telegram ✉
🟢 Non-Custodial Wallets:
Non-custodial wallets let users control their own private keys, which increases security since only the user has access to their funds. However, losing the private keys means there’s no way to regain access.
🔝 Popular Non-Custodial Wallets:
1⃣ MetaMask — 30 million active users
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Pros:
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Ideal for dApps, DeFi, and NFTs on Ethereum and EVM-compatible networks.
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Easy to set up on both browsers and mobile.
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Full control over private keys.
Cons ➖:
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Only supports EVM-compatible networks.
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Susceptible to phishing, especially with browser integration.
2️⃣ Trust Wallet — 10 million active users
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Pros:
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Supports over 65 blockchains and thousands of tokens.
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Built-in staking and dApp browser.
⚫️
User-friendly mobile interface.
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Cons:
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No desktop version, mobile-only.
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No two-factor authentication for added security.
3️⃣ Atomic Wallet — 5 million active users
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Pros:
⚫
Supports over 500 cryptocurrencies and tokens.
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Built-in staking and asset exchange.
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Available on both mobile and desktop.
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Cons:
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No two-factor authentication.
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Constant internet connection increases vulnerability to online attacks.
4️⃣ Exodus — 2 million active users
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Pros:
⚫
User-friendly, intuitive interface.
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Supports 100+ cryptocurrencies with built-in exchange.
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Integrates with hardware wallets (e.g., Trezor) for extra security.
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Cons:
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Lacks two-factor authentication.
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Built-in exchange fees may be higher than exchanges.
📌 Summary:
Hot wallets are great for frequent use and fast transactions but can be vulnerable to attacks. Choosing between custodial and non-custodial depends on your need for control and security: custodial wallets are beginner-friendly, while non-custodial wallets suit those who value full control over assets.
Which wallet do you use? I’m answering all your comments below! 👇