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Provider
Type
Hardware Wallet Compatibility
Security
Our Score
Hardware
YES
Very Secure
Software
YES
Secure
Software
Ledger, Trezor
Secure
Hardware
YES
Very Secure
Software
YES
Very Secure
Software
NO
Very Secure

If you’ve spent at least a day on the various online cryptocurrency forums, you’ve probably heard about the never-ending war between hot wallets vs cold wallets. The ongoing debate of which is better - hot storage or cold storage - seems like one that will never end.

In this guide, however, I want to tell you about cold wallets (Ledger Nano X, Trezor Model T, and others) - why they’re superior to hot ones, their pros, and cons, price ranges and give you a list of the best cold storage wallets out there.

We’ll go over the definitions, compare and contrast cold wallets with the hot ones, list both of their benefits and drawbacks, and see if we can find a clear winner.

Learning the Terms Beforehand

The terms “hot wallet” and “cold wallet” are used to differentiate cryptocurrency wallets. Make no mistake, though, for it’s not the temperature that these terms differentiate.

Cold wallet: Wallet and crypto coins.

Hot wallets are digital cryptocurrency wallets, while cold wallets are physical devices that store cryptos inside of them. There are other types of wallets, but hot and cold ones are the most famous ones.

Hot wallets are considered to be the more popular of the two. There are quite a few reasons why that is the case, and we’ll go through them in this guide. However, I will try to prove the point of why cold wallets are actually superior to hot ones.

Before moving further, here is a short summary of the main differences between hot and cold wallets:

Hot Wallet Cold Wallet
Online Offline
Free (in most cases) $50-$250
Averagely secure (vulnerable to hacking) Very secure (cannot be hacked remotely)
Stores most of the cryptocurrencies available Stores a limited variety of cryptocurrencies
Fast access to exchanges (even faster with browser extensions) Requires extra steps for accessing an exchange (like connecting your device to a computer)
Great for day trading Great for long-term HODLing

Now that we got that out of the way, let's go back to the beginning - what is a hot wallet?

Hot Wallets

The digital cryptocurrency storing wallets have been around ever since the inception of Bitcoin. They come in two forms - online and desktop wallets. Mobile wallets are also considered digital, but because of their mobility, they could probably be classified as a hybrid wallet.

The two huge perks that digital wallets have are their ability to hold any cryptocurrencies AND that they’re free.

First, let’s cover the “all cryptocurrency holding” part. In the debate of “hot wallets vs cold wallets”, this point is often brought up by the digital wallet supporters.

When a cryptocurrency is created and the ICO is set underway, it’s not functional until you have a place to store it. The creators of the crypto are usually the people that also develop and create the wallet for it, too.

Cold wallet: Digital wallet.

Various better-known and more mainstream cryptocurrencies (like Bitcoin, Ethereum, or XRP) have a wide variety of digital wallets available, with each offering different features and personalized customizations to choose from. Newer or lesser-known cryptos usually have one designated wallet with the basic functions of buying, selling, and trading enabled.

This is a key point in the “hot wallets vs cold wallets” debate - many people hold or want to hold different, less mainstream crypto coins, but they cannot do this whilst having, for example, a cold wallet.

Another huge factor is that hot wallets are generally free. You can simply find one that suits your wants and needs, register and just use it - free of charge. This isn’t leisure that the cold wallet lovers could brag about - devices cost money, which in turn lowers their popularity and use significantly. It is tough to say what the statistics would be if both hot and cold wallets were free, but that's not possible.

Cold Wallets

As I’ve mentioned earlier, cold wallets are specifically designed devices that are designated physical cryptocurrency storage. Though, do note that there are various types of cold wallets, including:

  • Hardware wallet. This is the type most people think of when hearing the words "cold wallet," as it's the most widely used one. Hardware wallets are small USB-flash-drive-like devices that store your private keys. (This is the type I'll focus on in this article)
  • Paper wallet. It actually is exactly as it sounds like - you have a paper with your private and public keys printed on it and it acts as your wallet. You have to store your paper wallet securely and out of reach, not only from others, but also from any damage. This type of wallet is quite old-fashioned, isn't it?
  •  Sound wallet. This one surely sounds interesting (pun intended). Sound wallets encrypt and store your private keys as audio files on CDs, USB flash drives, or vinyl disks, which can subsequently be decoded with a spectroscope app or an actual spectroscope to reveal the hidden codes.
  • Deep cold storage. This type can be used as an extra security measure on any of the cold wallet types mentioned above. Any approach that makes getting your wallet a hassle is considered deep cold storage. This includes putting your paper wallet in a safe and burying it underground, hiding your hardware wallet on your roof, or any other crazy idea you can come up with.

Now, cold storage wallets, just like the hot ones, have their pros and cons, so let’s go over them.

Cold wallet: Hardware wallet.

One of the biggest benefits that cold wallets provide is that you can have your cryptos beside you - wherever you go. You could never take the device out of your pocket - these wallets are usually small and compact, which enables both comfort and discreteness whilst transferring or simply carrying them around.

Cold wallets, however, have a few notable drawbacks when compared to their hot counterparts.

First of all, cryptocurrency cold storage tends to be expensive. A typical price tag for a cold wallet is around the $100 mark - depending on how much crypto coins you have, this could be dirt-cheap or extremely expensive.

Another huge drawback is that some cold wallets might have a limited variety of cryptocurrencies they can store. To be honest, most of the cold storage wallets out there are only able to store the main crypto coins in the market, such as Bitcoin, Ethereum, Dash, etc.

This reason, in addition to them being quite expensive, tends to lower the cold wallet usage by quite a bit.

Why Cold Wallets are Superior to Hot Ones?

If you’ve read the whole tutorial up to this point, you’re probably thinking - “how can cold wallets be superior? They are worse than hot ones!”. Well, there is one simple reason which makes cryptocurrency cold storage the way to go:

Security.

Cold wallets are the staple of security when it comes to cryptocurrency storage.

I have purposely kept this part out of the hot and cold wallet overviews. I have done this because it truly is so important that it deserves a section of its own.

Cold wallet: Bitcoin safe.

Hot wallets are the most vulnerable wallets in the world. All of the digital wallets store your security keys and codes in their online servers, which are extremely vulnerable to hacker attacks, scamming attempts and other ill intent-driven actions.

Sure, most of the high-profile hot wallet-offering sites and companies have major security measures put in place, but all it takes is the smallest loophole for your savings to be gone forever.

When it comes to digital crypto storage, there is only one option worth considering - insurance. Some platforms automatically grant you 100% insurance if you choose to trust them with your cryptocurrencies, which is a very rare and reassuring option.

Cold storage wallets, however, have a reputation for being impenetrable. The fact that your codes are nowhere else but in that little device surely offers a huge feeling of calmness. Moreover, some of these devices emphasize security so much that even if you would plug them into a computer that has a virus (a keylogger, leacher, or any other type of malware), your device would remain safe and secure.

Cold wallet: Hacker.

So, can a cold wallet be hacked? Yes and no. No, because, as explained above, most cold wallets could not be hacked even when plugged into a virus-infected computer.

Yes, because there is a possibility of someone physically stealing your wallet and your seed phrase. If someone has your wallet, they can try hacking it using various techniques (though many cold wallets have built-in protection for such cases). If someone has your seed phrase, on the other hand, they can create a new private key.

Thus, the lesson here is to make sure to keep your physical device and seed phrase out of reach for anyone else but you!

When thinking about appropriate crypto storage wallets, security should be your number one priority. Who cares if you get the best free wallet available if you are left broke and empty-handed just a few days later? The best cold storage wallets are most definitely the safest ones, too.

Main score based on expert evaluations & real user reviews.

Whether the crypto wallet is hardware, software, desktop or paper type.

For which purpose or for what kind of people is the cryptocurrency wallet best for.

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Final crypto wallet evaluation conclusion based on research, expert opinions & user feedback.

LEDGER NANO X TREZOR MODEL T

Overall Score

9.8
8.0

Wallet Type

Hardware Hardware

Best For

Best for Safely Storing, Sending, and Receiving Different Cryptocurrencies Best for Easily Control Funds, Manage Balance and Initiate Transfers

Latest Coupons

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Verdict

One of the best hardware cryptocurrency wallets ever made. One of the most-secure cryptocurrency hardware wallets on the market.
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Table: The main features of the Ledger Nano X and the Trezor Model T

Think of it this way: imagine that you have $5000. Two options are presented in front of you - place your money into a bank account that offers free storage but is very prone to break-ins (and has a history of it happening multiple times before) OR choose a bank account where you have to pay, let’s say, $100 but you can be sure that the rest of your funds are safe and sound. Can you catch my drift?

This is the main reason why I would say that cold wallets are superior to hot ones - you feel safe and assured that your cryptocurrency is safe while it’s in the cold storage wallet, which can’t be said about the hot one.

Now that we’ve covered this, let me tell you about the best cryptocurrency cold storage devices out there.

Latest Ledger Nano X Coupon Found:

Best Cold Storage Devices

Let me just preface this by saying that this list isn’t composed in any particular order.

Ledger Nano X [Find the Best Offer]

Ledger Nano X is by far one of the best cold wallets the industry can offer. Not only it supports thousands of coins but it also allows you to store and manage your NFTs.

Cold wallet: Ledger Nano X.

Ledger Nano X has some of the strongest security measures. Besides, with Bluetooth connection availability and compatibility with the Ledger Live app, Ledger Nano X is great not only for holding long-term (like most hardware wallets are) but also for day trading. Additionally, it's compatible with the most popular exchanges and dApps.

The price of the Ledger Nano X wallet ranges at around $149. While it might be more on the expensive side, it surely is worth it.

Trezor Model T [Get Limited-Time Offer]

Trezor Model T is a strong competitor of Ledger Nano X

Cold wallet: Trezor Model T.

It offers a sleek design with a wide touch screen, USB-C connection, and other advanced technical specifications. While it might be a bit bulkier, it still easily fits in your pocket. Besides, Trezor Model T offers great security measures, including Advanced Shamir Backup and FIDO2 & U2F authentication standards.

Trezor Model T retails at around $219. Obviously, it's not the most affordable option out there, but it definitely provides features that are worth the price.

Ledger Nano S Plus [See the Best Deal]

Ledger Nano S Plus is a more compact, entry-level, and lower-cost Ledger wallet compared to Ledger Nano X. Previously, Ledger offered the Nano S model. However, Ledger Nano S was discontinued and replaced with Ledger Nano S Plus.

Cold wallet: Ledger Nano S Plus.

Ledger Nano S Plus offers outstanding safety precautions as well as supports over 5,500 coins and NFTs (yes, it even supports NFTs). Besides, it is compatible with the Ledger Live app, which allows you to use your Ledger wallet for so much more than just storing crypto assets.

The Ledger Nano S Plus currently goes for around $79. Don’t let the price tag fool you, though - it is a huge name in the cold wallet industry.

Trezor One [Grab a Great Deal]

Released back in 2013, Trezor One is the very first cryptocurrency cold wallet ever made. By popular opinion, it is one of the safest possible ways to store your cryptocurrency.

Cold wallet: Trezor Model One.

Trezor is quite small and compact, making it easy to carry around. The company constantly updates its hardware to maintain the highest level of security possible.

Trezor retails around the price of $69. All things considered, it has a great price and quality ratio.

KeepKey [Unlock the Best Offer]

KeepKey has a reputation of being the most fashionable cold storage wallets. It’s quite a bit heavier than its two predecessors, which can be a good thing or a bad thing - you be the judge.

Cold wallet: KeepKey.

KeepKey is also one of the youngest hardware wallets in the industry, which means that it has a lot of catching up to do in terms of experience. However, it isn’t on this list without a reason - being so young, it has still managed to establish a name within the cold wallet enthusiast circles.

KeepKey retails at around the $49 range. As of writing, it has the best price compared to the wallets mentioned above.

CoolWallet S [Check Out This Offer]

The CoolWallet S is an up-and-coming cold cryptocurrency wallet that has been making the rounds as of late. It's the world's first mobile crypto wallet - this means that even though it stores your cryptocurrency offline, everything is accessible on the mobile app that comes along with it.

Cold wallet: CoolWallet S.

The CoolWallet S retails at $99. If you choose to buy two at a time, it will cost you $178. All things considered, that's a great price!

Even though the CoolWallet S is still relatively young, it has already proven to be extremely reliable and user-friendly. Though note that there is also an improved version of CoolWallet S called CoolWallet Pro, it's worth your attention as well.

Choosing a Cold Wallet

Now that you have an understanding of how different wallets behave and what benefits and drawbacks they have, it would be a good idea to define the criteria of picking the appropriate wallet for yourself.

I don’t want to get repetitive, but let me stress this just once more - security should be your highest priority when choosing a crypto storage wallet. There is nothing more important than keeping your cryptos safe, and a good wallet can ensure this with no problem.

Whether or not (and for how long) the crypto wallet offers a time period in which you can return the wallet free of cost.

The lowest cost of each brand's product. These are regular prices without discounts.

What kind of additional fees you may have to pay for extra services.

LEDGER NANO X TREZOR MODEL T

Money Back Guarantee

14 days 15 days

Base Price

149 EUR 219 USD

Service Fees

N/A N/A
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Table: The pricing options of the Ledger Nano X and the Trezor Model T

Secondly, you’ll want to make sure that your wallet isn’t stupendously hard to use. Some wallets do have a steep learning curve - all of the options and settings in the UI can throw even the biggest crypto experts off. There are plenty of wallets that have user-friendly, approachable and understandable interfaces - take your time and pick one that suits you the most.

Another thing to consider is convenience. If you’re more of a hoarder that likes to have as much of the cryptocurrency as possible (to perhaps sell it off later on), then you don’t need a wallet that’s super easy to access. If you do plan to perform a lot of transactions, however, then your wallet would preferably be quite easy to access.

Cold wallet: Ledger and Trezor wallets.

Lastly, if we’re talking about cold wallets, the size and compactness of the wallet are probably also going to play a part in your choice. Maybe you’re a person that likes to feel the weight of your stuff, so having a heavier wallet is a pro rather than a con? Or maybe you want something really small and light, so you wouldn’t even notice it while carrying it around?

This part is honestly completely preferential - it all depends on the person in question.

Also, don’t forget that you can split your savings - let’s say, you can store the bulk of your Bitcoin in a cold wallet and then just lock it away somewhere, but at the same time keep a small portion of it in a digital wallet for easier accessibility and convenient use. Don’t be afraid to experiment - just be cautious while doing so.

Compare Crypto Wallets Side by Side With Others

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Conclusion

We’ve covered the debate of “hot wallets vs cold wallets” by giving different points of view and talking about the pros and cons of both sides, talked about the best cold storage wallets, and went over the main features to look at while searching for an appropriate cryptocurrency wallet. Be sure to put the information that you acquired here to good use - pick a wallet that will serve you for many years to come!

If you do decide on purchasing a cold wallet, don’t hesitate to do some more research on the internet beforehand - we only went over four of the main hardware crypto storing devices in this guide, but there are many more in the market! Perhaps you’ll come across one that will suit your needs perfectly.

If you want to decide instantly, I'd recommend checking out one of the two - Ledger Nano X and Trezor Model T.

Here's the most attractive deal for Ledger that you cannot miss:

The content published on this website is not aimed to give any kind of financial, investment, trading, or any other form of advice. BitDegree.org does not endorse or suggest you to buy, sell or hold any kind of cryptocurrency. Before making financial investment decisions, do consult your financial advisor.

About Article's Experts & Analysts

By Aaron S.

Editor-In-Chief

Having completed a Master’s degree on Economics, Politics & Culture for the East Asia region, Aaron has written scientific papers with a comparative analysis of the differences between US’ Western and Japan’s Collective forms...
Aaron S., Editor-In-Chief
Having completed a Master’s degree on Economics, Politics & Culture for the East Asia region, Aaron has written scientific papers with a comparative analysis of the differences between US’ Western and Japan’s Collective forms of capitalism, 1945-2020.
With close to a decade of experience in the FinTech industry, Aaron understands all of the biggest issues and struggles that crypto enthusiasts face. He’s a passionate analyst who is concerned with data-driven and fact-based content, as well as that which speaks to both Web3 natives and industry newcomers.
Aaron is the go-to person for everything and anything related to digital currencies. With a huge passion for blockchain & Web3 education, Aaron strives to transform the space as we know it, and make it more approachable to complete beginners.
Aaron has been quoted by multiple established outlets, and is a published author himself. Even during his free time, he enjoys researching the market trends, and looking for the next supernova.

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FAQ

Which is the best cold storage wallet?

Based on the customer reviews, the cold wallets that are the most recommended are Ledger Nano X and Trezor Model T. Both of them are highly reliable, comfortable and sleek-looking. Not only that, they ensure fool-proof security. Thus, with these wallets, you funds will surely be protected.

What is the main difference between a cold storage and a hot wallet?

The main difference between the two wallets is that hot wallets are connected to the internet, while cold wallets are kept offline. That being said, hot wallets are so much less secure compared to cold storage. If you want to find the best wallet for your needs, you should check out this list.

What types of cryptocurrency wallets are there?

In total, there are four big types of cryptocurrency wallets - online, hardware, software (app), and paper ones. Each of these types of wallets have their own features, benefits, and shortcomings, and are thus going to be suitable for different types of people, too. Security-wise, paper wallets are seen as the best alternative, while convenience-wise, software and online ones should be your go-to options.

What are “hot” and “cold” wallets?

Hot wallets are those crypto storage pieces of software that maintain a constant connection to the internet. As opposed to that, cold wallets are hardware devices that store your cryptos offline. Safety-wise, cold wallets are considered the best option - since they are always offline, you don’t need to worry about some sort of a hacker stealing all of your cryptocurrency assets.

Are hardware wallets worth investing in?

It depends, but in most cases - yes. If you’re just starting out with cryptocurrency trading and investing, a hardware wallet might be a bit of an overkill - it is generally considered that hardware wallets should be purchased once you have a significant amount of crypto, and want to keep it safe. If you’re an active trader, that can also dissuade the matter even further - trading-wise, software and online wallets are much more convenient.

Can you keep your cryptocurrencies in two or more wallets at a time?

Definitely! It’s also part of crypto storage best practices, too! Most cryptocurrency enthusiasts prefer to have a software and a hardware wallet - the former for easy access and trading, and the latter for safe storage. However, you can also utilize multiple wallets simply in order to make sure that your assets are safe and sound. This way, if one of your crypto wallets becomes compromised, you won’t lose all of your assets.

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