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Is an intermediary wallet necessary? (lemmy.world)

submitted 2 days ago by [email protected] to c/[email protected]

3 comments fedilink hide all child comments

I've been having to dig into some crypto savings and paying by converting to fiat. I've got a subscription that can be paid with crypto (which I've never done) and was gonna send from Ledger to a hot wallet to pay but I suppose I could just send it directly from Ledger yeah?

Without thinking about it I just assumed it'd be safer to transfer to a hot wallet but right before I did, I wondered why? I can't think of any reason paying directly from a cold wallet would have any risk compared to transferring out first. Would I have just wasted transfer fees or is there a good reason to transfer out first?

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[–] [email protected] 1 points 2 days ago (1 children)

As long as all the keys are sufficiently random, there isn't realy any additional risk to paying directly from a cold wallet, it just has more steps.

[–] [email protected] 2 points 1 day ago (1 children)

Great, thanks

[–] [email protected] 1 points 1 day ago

I suppose there is one risk to using a cold wallet often: if your use if that wallet is normalized, then it can be harder to spot malicious things when they happen, if you are not diligent.

Take that hack that happened last year on that one exchange (I forget which). It was reported in the press that their cold storage was hacked, but in reality what happened was an extremely targeted attack that redirected cold wallet transactions to addresses controlled by the hacker without the signers' knowledge. The same thing can happen on a hot wallet, of course, but you have fewer funds in that, don't you?

So just to be safe, if you use a cold wallet for transactions like this, make sure to limit the number of devices you use it with, and practice good internet hygiene on those devices.