A hot wallet is a cryptocurrency wallet that stays connected to the internet, offering convenience for fast transactions, trading, and interacting with decentralized apps (dApps)
through devices like computers or smartphones, but this constant online state makes it more vulnerable to hacking and cyber threats compared to offline "cold" wallets. Types include web, mobile, and exchange wallets, which store your private keys online for easy access, making them great for active users but less secure for large, long-term holdings.
Key Characteristics:
- Internet-Connected: Always online, allowing instant access and transactions.
- Convenient: Easy to use for daily crypto activities like sending, receiving, and trading.
- Software-Based: Resides in applications on your phone, computer, or web browser.
- Vulnerable: Higher risk of theft from online attacks (malware, phishing) due to constant connectivity.
Examples:
- Mobile Wallets: Trust Wallet, Coinbase Wallet.
- Desktop Wallets: Exodus.
- Web/Exchange Wallets: MetaMask, wallets integrated into exchanges.
Best For:
- Small amounts of cryptocurrency used for frequent transactions or trading.
Security Tip:
- Keep only the crypto you actively use in a hot wallet and move larger sums to a more secure cold wallet (offline storage) for long-term safety.
