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Assalamualaikum steemians
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How are you?Hope so everyone would be safe and sound just like me as I am also safe Alhamdulillah...
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My today's topic is all about cryptocurrency and hot storage so I would like to elaborate different points about it and not only this ,I would also try my best to add a practical example with it.
)[Source](https://pixabay.com/photos/bitcoin-cryptocurrency-currency-2643160/)
Cryptocurrency and hot storage are interrelated with each other, as well all know that hot storage defined as online storage of digital tokens, that make it easily available and able to transfer. Hot storage have multiple options that includes digital wallets, exchanges, and online banking platforms. While it is important to understand that hot storage have multiple risks of security, as private keys are more prone to hacks and online threats.
Hot storage is able to keep cash in wallet in easy way and is approachable but also more prone to loss or theft. In comparison, cold storage is just like a safe ,vault which provide additional layer of security so it protects assets from any illicit and unauthorized access.
When you use hot storage for crypto then it's crucial to give priority to security measures like some of them I am explaining below;
- You should use some strong passwords and 2-factor authentication for providing additional layer of security.
- It is used to enable multi-signature wallets.
- It is used for continuous monitoring of accounts and different transactions
- It utilize reputable and secure exchanges and wallets that are well known and well recognised.
By knowing about risks and by taking proactive steps, individuals can reduce dangers that are linked with hot storage and it gives surety about security of their cryptocurrency assets. A well constructed approach so it combines hot and cold storage and in this way it's a way providing convenience and security both things.
**Practical example**
Here's a practical example:
Imagine there is a person whose name is Ali and he use a well known cryptocurrency exchange and let's say that exchange is "CryptoX," which is utilizing for storing his Bitcoin (BTC). He store his BTC in hot wallet which is connected to his exchange account so it permits an easy approach for trading.
But this is a kind of thing which comes with risks and different challanges.There was a day when CryptoX experience a security breach, and in this way hot wallet of Ali becomes compromised. Hackers attack on his wallet and try to steal 2 BTC
After that for minimization of future risks and further more challanges Ali moves his remaining BTC that were secure to cold storage hardware wallet and in this way he utilized a both of hot and cold storage so it balances convenience and security both for safety of his crypto assets.
That was all about cryptocurrency and storage and practical example which implement at a imaginary person that how he uses hot storage. Now hopefully the topic is clear to all of you...
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Thanks
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