Some people may find it difficult to buy a "Cold Wallet," as the prices are high for those with low income and/or who are just starting to invest in cryptocurrencies. With this in mind, I created a high-security "Hot Wallet" protocol for you to protect your assets with an extra layer of care. The idea is simple: separate the everyday use from the management of your cryptos, minimizing risks and maximizing your peace of mind.
The protocol that will be presented is an excellent strategy for those who wish to maximize the security of their assets in a "hot wallet," bringing it closer to the level of a "cold wallet" without the additional cost of a hardware device. For significant amounts, the recommendation of a "cold wallet" still stands as the gold standard. However, for most users with moderate amounts of cryptocurrencies, this method offers a statistically much higher level of security than the conventional use of a "hot wallet," making it a highly recommendable option.
The separation of devices and the offline isolation of private keys reduce the attack surface by perhaps 80-90% compared to a hot wallet used on a daily-use smartphone. The risks of losing funds due to malware, phishing, or network compromise are drastically diminished.
For this protocol, you will need two smartphones (or one phone and another type of device - PC, Notebook, etc.). I recommend using Trust Wallet.
Mobile (PC or Notebook) Monitor: This is your normal-use device. You use it for all your daily activities – communication, social networks, and other apps. It will be your control and monitoring point, and for that, we will use the app or website of CoinStats.
Vault Phone: It can be that relatively old mobile phone that is kept aside and is unused. It should be a formatted, "clean" device (preferably without a service history) and from a recognized brand. The golden rule for the "Vault Phone" is: NEVER download additional apps or browse the internet through it, except for essential and specific actions of withdrawing cryptocurrencies from the vault when necessary (preferably generate the private key on a mobile phone).
The most important observation for your "Vault Phone" is about the internet. It should remain offline at all times, connecting only to make withdrawals or update the wallet app. And, attention: this connection must be made on a highly reliable and non-public network. Always download and update the wallet from official sources, such as the App Store or Play Store.
Step 1: First, on your "Vault Phone," download the wallet app. As soon as the installation is complete, immediately turn off Wi-Fi and mobile data (and activate Airplane Mode for extreme paranoid security [recommended]). It is crucial that the wallet is offline for the next step.
Step 2: With the internet completely turned off, start the process of creating a new wallet in the app. Generate your 12 recovery words (seed phrase). This is the most critical moment: write them down carefully on paper. Never, under any circumstances, save them in any digital format or upload them to services like Google Drive. A manual copy in a safe place is the only way to ensure the inviolability of these words.
Now that your "Vault Phone" is set up and offline, let's proceed to the role of the "Monitor Device" to safely track your asset movements without compromising the security of your main wallet.
Step 3: To monitor your assets, you will need the public addresses of the cryptocurrencies you store on the "Vault Phone." Remember: the public address is like your bank account number – it can be shared without risk, as it only allows funds to be sent to it, not access or movement.
On your "Vault Phone" (still offline), open the wallet. For each cryptocurrency you own (Bitcoin, Ethereum, BNB, etc.), select it on the main screen, tap on "Receive," and the app will display the corresponding public address (a sequence of letters and numbers and/or a QR code). Write it down manually (you can also use the QR Code). Check and review each character. Repeat this process for all cryptocurrencies you store on the "Vault Phone" and wish to monitor.
Step 4: On your "Monitor Device" (the one you normally use and that is connected to the internet all the time), download and go to the app or website of CoinStats, in the "Track Any Wallet" option, write or scan the QR code of the public address of the cryptocurrency you obtained from the "Vault Phone."
You will be able to view the current balance, transaction history, and all incoming and outgoing movements on the "Monitor Device."
Important: NEVER enter your 12 keywords or private keys on the "Monitor Device" or any monitoring website/app. Monitoring should only be done with public addresses.
The goal is passive monitoring. You are only "seeing" what happens with your assets, without the ability to move them from the "Monitor Device." Any transaction (sending funds) will always require the "Vault Phone" and a timely connection to the internet. Do not connect the wallet to any dApp, do not stake, or click on anything else; it will only be used to store and send cryptocurrencies, nothing more.
Keep the operating system and apps of your "Vault Phone" always updated to mitigate security risks. Turn off the internet whenever you finish.
By following this methodology, you ensure that your private keys – the real key to your funds – remain secure and isolated in an offline environment, while still allowing you to track the performance and movements of your assets in real-time through a separate device that is more exposed to the online environment.
Obviously, a cold wallet is much safer for storing significant amounts, but in the absence of one, this is the best method for securely storing your assets.
The protocol described for using a "Monitor" and a "Vault" introduces significant security layers that, while not transforming the "hot wallet" into a "cold wallet," substantially elevate the level of protection compared to the traditional use of a hot wallet on a single connected device.
The statistical assessment of the security level for this protocol can be approached by considering the reduction of the attack surface and the mitigation of common attack vectors.
Isolation of Private Keys is the fundamental pillar of the protocol. By keeping the "Vault Phone" offline most of the time and using it exclusively for transactions and specific updates, the exposure of private keys to online threats is drastically reduced.
By connecting only to reliable and non-public networks, the risk of data interception or man-in-the-middle attacks is significantly reduced.
The protocol restricts the use of the "Vault Phone" to only a few essential actions (generate the wallet, receive and send cryptos, update the app). This reduces the number of interactions that could introduce vulnerabilities.
Fewer interactions mean fewer opportunities for human errors that could compromise security, such as clicking on malicious links or downloading fake apps.
The "Monitor Device" operates only with public addresses. This means that even if it is compromised, the private keys will not be exposed.
The risk of private keys being stolen from the "Monitor Device" is zero, as they are never entered or stored on it. This protects against attacks directed at the monitoring device.
The likelihood of the "wallet phone" being infected by malware/spyware is very low due to its internet isolation and download restrictions. Even if the "Monitor Device" is infected, there are no private keys to be stolen.
By connecting the "Vault Phone" only to reliable and non-public networks, the risk of attacks through insecure Wi-Fi networks is virtually eliminated for critical operations.
