Is A Hot Wallet Unsafe?
In our last article, we wrote about the simplicity and security that define the idea behind our cold storage solution. The cold storage solution is indeed what foremost makes us different from many other mobile wallets. However, if you want to spend and receive coins, then you deserve a hot wallet done right as well.
Our hot wallet works as your full-service wallet and is perfect for storing smaller amounts of crypto. Apart from the cold wallet, which you need an offline mobile device for, the hot wallet is installed on your everyday smartphone, and therefore it is very convenient for quickly selling and receiving coins.
What one must remember is that just because a hot wallet is online, it does not necessarily mean that it is unsafe to use. As opposed to a cold wallet, it can be exposed to hackers as everything else in an online environment, but there are features that can make your usage of a hot wallet more secure. We are constantly trying to develop our wallet to enhance your user experience to the fullest. First, all transactions that you make are signed with the COINiD Vault, and never in the wallet itself. This makes it possible for you to double-check that your phone has not been compromised as you can verify that the generated address is the same in both the wallet and in the vault before you sign the transaction. Furthermore, your private keys never leave your device, and the wallet only uses publicly available blockchain data.
We were also aware when developing the wallet that transaction fees might be considered a concern for those who frequently trade crypto. Therefore, we added the feature of transaction batching, which makes it possible to send several transactions at once which will lower the transaction fees and save space on the blockchain. Except for lowering fees, this of course also contributes with conveniency and time-saving. Furthermore, we also included Smart Fee Estimation in the wallet so that you can get an approximate fee depending on the current blockchain load.
When we first released COINiD, we were offering a wallet for Bitcoin as the only coin. Today, we also offer Myriad and Groestlcoin wallets both for Android and iOS devices. No matter what coin you prefer, the user experience should be the same. Below follows a brief set-up guide for our hot wallet (for a more detailed step-by-step guide, click here).
- Download both the desired wallet for COINiD and COINiD Vault from App Store or Google Play.
- Start up the wallet and choose “Create hot wallet with COINiD”. Then choose whether you would like the wallet to generate SegWit or Legacy addresses..
- The app will now automatically switch to the COINiD Vault app where you choose “Create new COINiD”.
- You will now come to the recovery phrase. The app will give you 12 different, random words in separate views. Make sure to write them all down and keep them in a safe space. These words will enable you to restore your COINiD Vault.
- Choose a personal pin code and confirm.
- After confirming your pin code you will need it to confirm checkout of public keys to the wallet.
- Now the vault will send you back to the wallet and you are all good to go to start trading Bitcoins.
Security aspects of cryptocurrency is a debate that can be heard every day, and we believe that even for hot storage, users must be comfortable with and trust the wallet they are using. Nevertheless, we must remember the other features of cryptocurrency which establish the reason for their development in the first place. For crypto to function as a currency, it must be simple and fun to buy with coins. Easy, secure and fun! That is what we believe that cryptocurrency should be all about, and that is what we try to reflect in our wallet. Hot or cold.