Anyone that invests in Bitcoin will need to know which bitcoin wallet to use. Unlike fiat currency, Bitcoin doesn't require that you use a bank or any other intermediary, which means that you need to hold your token's private keys in a wallet. These wallets can be hot or cold, which are terms we will talk about below.

Wallets can be hot, which means they are connected to the internet all of the time, or cold, which means they are almost always offline, or totally isolated from the internet. Both kinds of wallets have their uses, and neither is 'better' than the other on an overall basis.

Hot Wallets

If you plan on sending or receiving Bitcoin or other tokens on a regular basis, you should have a hot wallet. They are generally software-based, and will operate on a PC or smartphone. The good news is that hot wallets are generally free, but the bad news is that they are much easier to hack.

Cold Wallets

A cold wallet is a device, generally hardware based, that is designed to hold Bitcoin. It can be connected to the internet as needed, but in general, these devices are offline unless a transaction is being made. While you will have to pay for a cold wallet, the prices have come down in recent years.