Like other mobile and computer software, it can be downloaded and connected directly to the Internet.
Advantages of Hot wallet:
Hot wallet is free and is a good option for daily transactions.
Due to direct connection to the Internet, it is at risk of cyber attacks and hackers.
Types: Desktop wallet, mobile and web (exchanges). Example: Mobile wallet: Trust wallet, Bitcoin Wallet, GreenAddress, Atomic Wallet, BitPay.
Desktop wallet: Atomic wallet, Bitcoin Core, BitPay, Electrum and Exodus, Website wallet (exchange): Coinbase, Binance…
Cold Wallet is a small, portable device similar to USB. You can download and carry your cryptocurrencies in it.
Advantages of a cold wallet:
It is the best option for long-term storage of cryptocurrency assets, as the assets are stored offline and there is no risk of hacking.
Disadvantages: Cold wallets have a relatively high price. It could also be lost. Examples: Trezor company for $60 to $200 and Ledger company for around $60 to $120.
How to use a digital wallet?
The cryptocurrency wallet allows the trader to purchase cryptocurrencies by storing private and public keys. You can access and trade your account with the private key of your wallet and trade, or change your cryptocurrency to another type of currency or Fiat currency.
When you want to buy or receive a cryptocurrency in any way, you must first provide a unique address with a combination of English letters (uppercase and lowercase) and send the numbers issued by the wallet to the sender.
In fact, a digital wallet address acts like your real-world bank account number. For this reason, as the publication of the bank account number is not risky, providing a digital wallet address is necessary to carry out the money transfer process and it does not endanger the security of your property.