When you are holding bitcoin you need to know which Bitcoin wallet is best for your needs. There are many options, but there are just two main types to choose from, hot wallets, and cold wallets. If you plan to be sending and receiving Bitcoin a lot, your only choice is a hot wallet, but you may want to consider having both.

Hot Wallets

A hot wallet is generally software that operates on a PC or smartphone. The wallet holds the private keys for your Bitcoin, and you can send payments, or receive them whenever you like.

These wallets are connected to the internet all the time, so the risk of being hacked is much higher. For large amounts of tokens that you don't plan to use often, a hot wallet isn't the best choice.

Cold Wallets

Cold wallets aren't connected to the internet unless they are making transactions, and they are generally hardware devices that are specifically designed to hold tokens. There are a few cold wallet manufactures out there, and one of the most popular is Ledger.

Some companies also create cold wallet systems with computers, but these are for larger holdings, like the Bitcoin that an exchange would use for settlement.