19 May, 2022

Wallet Taxonomy

Category: Insight

Hot, Warm, and Cold storage are terms often heard in describing storage approaches for crypto assets, but surprisingly these terms remain largely undefined.

The lack of clear definitions not only causes confusion (ones person’s Hot is another person’s Warm), but also has significant implications in an insurance context specifically around what types of wallets are allowed in a program or covered in an insurance policy. 

Evertas has addressed this lack of clear definitions by developing a comprehensive taxonomy to identify wallet storage types in the table below.

Wallet Implementation
Version 1.0
Is the wallet implementation connected to the internet?
Yes, Single Signature Yes, Multi Signature No
On-chain wallet / Smart Contracts Hot: On-Chain Hot: On-Chain N / A
FIPS Rated HSM (Level 3+) Warm Warm Cold
FIPS Rated HSM (Level <=2) Hot: Off-Chain* Warm Cold
Non-FIPS Rated HSM Hot: Off-Chain* Warm Cold
Non HSM: Electronic with secure enclave (e.g., smartphone, tablet) Hot: Off-Chain* Warm Cold
Non HSM: Electronic without secure enclave (e.g., computer) Hot: Off-Chain* Hot: Off-Chain* Cold
Non HSM: Non electronic (e.g., metal wallet, not connected to computer, SD card, paper, magnetic tape) N / A N / A Cold
*Discuss with Evertas


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