Qué tipos de wallets existen: wallets Calientes

There are many alternatives for the storage of our cryptoassets. The famous "Wallets", or wallets, are the key concept of all Blockchain for the access and management of digital assets.

What is a wallet?

When we talk about wallets, we refer to a tool that can be both hardware and software and that stores the public and private keys for accessing cryptoassets. Wallets as such do not store cryptocurrencies or tokens. They will always be inside the Blockchain to which they belong. The wallets are the ones that allow us to access those digital assets and, through the keys, we prove to be the owners of those assets and we can use them.

Types of wallets

Depending on the type of wallet, they will have different characteristics, but all with the same purpose.

Hot wallets

By "hot" we refer to internet connection. A hot wallet, or Hot Wallet, is constantly connected to the internet. The internet connection gives hot wallets a point against them, since we do not usually disconnect the internet from our cell phone or computer and perhaps they are not the ideal wallets to store large amounts of cryptoassets in the long term (years).

Our devices can be infected with some Malware, so we must take the necessary measures to use this type of wallets.

Depending on the Blockchain with which you want to interact, and the assets you want to manipulate, you will need one or another application. Metamask is the wallet par excellence to store cryptoassets compatible with the Ethereum Virtual Machine (ETH, BNB, etc), in addition to bitcoin. If you want to access the Solana ecosystem, the ideal wallet is Phantom. There are other apps like Coinbase Wallet that I encourage you to explore until you find the ideal one for you.

These types of wallets are applications that you can install either as a browser extension or as a mobile app. Very easy to use to connect to a dApp and interact with Web3 applications.

Cold wallets

Cold wallets, also called Cold Wallet or hardware wallet, store cryptoasset recovery keys on hardware devices that do not have internet access. They are ideal for "loitering" cryptocurrencies for years and storing significant amounts of money.

Cold wallets are often combined in a complementary way with a hot wallet as an authentication method to a marketplace or a decentralized application. It adds a new layer of security and acts as 2FA.

The most popular hardware wallet brands are Trezor and Ledger. Both with very good performance and quality when it comes to storing the keys of our cryptoassets in small devices similar to a pendrive.

Mnemonic phrases

All types of wallets have a common denominator, the recovery phrase or seed key. These consist of 12, 18 or 24 random words that are used to generate the wallet's private key by passing them through a complex encryption algorithm.

These recovery words must be stored meticulously. If they lose them, you will lose the cryptoassets they back up forever. Nothing and no one can help you recover the keys in the decentralized world, you are 100% responsible for the care and security.

Recovery phrase security

The words to recover a private key must be guarded very well. It is recommended to store them in the physical world. Write down each word with a pen and paper and keep it in a very safe place.

If you decide to write down each word on a sheet of paper, you must take into account the passage of time. Humidity, temperature and other factors can affect the legibility of the writing. Use paper and pencil of excellent quality or even laminate the paper (laminate it yourself, don't let someone else do it).

It is not at all advisable to save the recovery phrase in a .txt file, in Drive or similar digital and centralized media. Not even in a password manager like Bitwarden.

The order of the words is also crucial. Make sure you save each of the 12, 18 or 24 words in the same order they were given to you.

Another great alternative I invite you to explore is CryptoSteel. Stainless steel, waterproof and fireproof artifacts that you can use to store each word.

Conclusion

There are many concepts to study about the use of wallets. From the different types, when it is convenient to use each one, the recovery phrase and the security and good practices to store them.

If you are new to the Blockchain world, you will gradually find the best way to manage your wallets and find the best and most comfortable way for you to use this type of applications.

Contributed by: Kevin Fiorentino (Platzi Contributor).