Hot wallets are wallets that are permanently connected to the internet or hosted on a network. They are supplied as a standalone product, called a “software wallet”, or as a service of a crypto exchange, a so-called “exchange wallet”.
Convenience and risk of hot storage
Crypto investors can store the same coins in multiple vaults, including cold and hot. The use of hot storage simplifies cryptocurrency transactions. On the exchange, ETH to BTC exchange is possible at any time without any additional steps. But due to the constant connection to the Internet, they are more vulnerable to attacks by hackers. That is why some users choose cold storage for long-term storage of their cryptocurrencies.
Compatibility between wallets simplifies access to additional features. However, it is worth considering that the use of several wallets for the same cryptocurrency also increases the vulnerability of your funds. Each individual vault represents a potential access point for revealing the keys to your cryptocurrency holdings.
Security is a major issue when it comes to cryptocurrencies, which is why some hot wallets offer a refund feature for stolen cryptocurrencies. This is an important feature that gives you peace of mind and ensures that this is a safe place to store your non-fungible tokens (NFTs).
Coinbase Wallet is one of the products of the Coinbase exchange and belongs to the category of hot wallets. In addition to it, users have access to the Coinbase dApp storage and the storage on Coinbase Exchange.
The company claims that Coinbase Wallet supports “hundreds of thousands” of crypto assets. For example, Bitcoin support requires a mobile app.
Coinbase Wallet easily connects to its own crypto exchange and many other major decentralized crypto exchanges (DEXs), such as Uniswap (UNI), Sushiswap (SUSHI), 1inch (1INCH), TraderJoe and more. In addition, it is compatible with Ledger devices and supports the staking of some assets. However, if the funds are stolen, there is no refund.
SafePal offers a combination of hot and cold crypto storage, and its hardware version costs around $50 and is one of the most budget-friendly solutions on the market.
The hot version is used by over 6 million users in over 190 countries. It supports all major cryptocurrencies, including popular stablecoins.
SafePal is integrated with the Binance crypto exchange, making it easy for users to buy and sell crypto through their wallet.
However, SafePal’s customer service is limited and users must fill out a “submit a request” form to receive support. Also, the SafePal interface can be tricky for newbies.
Crypto.com is a popular cryptocurrency exchange and the Crypto.com DeFi Wallet is designed to store decentralized finance (DeFi) products of your crypto assets. Users can easily access the Crypto.com exchange through their wallet to buy and sell cryptocurrencies.
It supports over 800 crypto assets, including popular stablecoins and the top 20 cryptocurrencies by market cap. Staking of some coins is available, but this does not apply to Ethereum yet. You can even get discounts on individual tokens
Exodus supports over 225 cryptocurrencies. This is a great choice for a beginner as the wallet provides tutorials including video.
In addition, the built-in Exodus exchange allows you to trade cryptocurrencies and stake directly from your wallet. This exchange functions as a DEX. Compared to centralized exchanges, it is usually less regulated and has lower liquidity, but does not require the disclosure of personal data.
Exodus is integrated with Trezor and also returns funds in case of theft. Some coins can be staked, but Ethereum is not one of them.
Coinbase dApp Wallet
Coinbase dApp Wallet is integrated into the Coinbase mobile app and is focused on Ethereum. It facilitates the trading of tokens only available on decentralized exchanges (DEXs) by allowing users to interact with DEXs and various decentralized applications (dApps).
Since this application is focused on Ethereum, many of the major cryptocurrencies are not supported.