A coffee-shop analogy
Three wallets, three real-world counterparts:
- Hot wallet = the cash in your pocket. Convenient, but if stolen it's gone.
- Cold wallet = a gold bar in a bank vault. Slow to access, very hard to steal.
- Custodial wallet = a bank account. The bank keeps it safe, but it can also freeze it.
Crypto wallets work the same way.
Hot wallet
- Examples: MetaMask, Trust Wallet, Phantom, imToken.
- Keys live on an internet-connected device, great for DeFi / NFT / quick transfers.
- Risks: malware, phishing sites, clipboard hijacking.
- Suggested balance: day-to-day funds, no more than HK$50,000 equivalent per address.
Cold wallet (hardware)
- Examples: Ledger, Trezor, Keystone.
- Keys stay on offline hardware; each transfer needs a physical button press.
- Risks: lost seed phrase, stolen device, social engineering.
- Suggested balance: anything you intend to hold over HK$50,000.
- See hardware wallet recommendations and setup.
Custodial (exchange) wallet
- Examples: balances inside HashKey, Binance, OKX accounts.
- The exchange controls the keys; you only have a withdrawal right.
- Risks: exchange insolvency (FTX), account freezes, internal risk controls.
- Suggested balance: only what you actively trade.
Quick picker
| Use case | Recommended | |----------|-------------| | Small daily / DApps | Hot wallet | | Long-term holding | Cold wallet | | Active trading | Custodial + hot | | Large idle (>HK$500k) | Cold + multi-sig |
Your seed phrase IS your money. Anyone — "support agent", call, Telegram, QR code — asking for your seed phrase is a scammer.
Action checklist
- Learn to send and receive BTC on a hot wallet.
- Cross HK$50k? Buy a hardware wallet.
- Hand-write your seed phrase twice on paper; split storage between home and a vault. Never keep it digital.
- Do an annual restore drill on a spare device.
