What is the difference between Hot and Cold crypto wallets?

Cold wallet is a truly decentralized crypto wallet. This means it is only generated once and user (wallet owner) is personally responsible for storing its secret key. If the secret key is lost, nobody will ever be able to recover crypto assets (tokens and coins) held in the wallet.

Hot wallet is managed by someone on behalf of a user. User does not manage the secret key, instead the crypto assets or wallets are managed by a 3rd party entity. This is more convenient for most end users as it allows them to contact technical support and restore access to their assets in case the password is lost etc. However this also means the custodial organization and anyone accessing their systems (including hackers) could be able to transfer user’s crypto assets without user’s permission. An example of hot wallet scenario is Coinbase.

By default, crypto wallets in Dappros Platform are hot wallets. This means you as organisation have control over crypto assets and wallets of your end users. This also makes it possible to display organisation-wide statistics of crypto balances, restore wallet access in case of lost password etc.