Hot Wallet

A hot wallet is a cryptocurrency wallet whose private keys are stored on a device connected to the internet, such as a phone, laptop, or web browser. The connection makes it fast and convenient to send funds, interact with decentralized applications, and trade, but it also exposes the keys to online threats like malware and phishing.

A mobile wallet app on your phone is a typical example: you can scan a QR code and pay someone in seconds, or connect the wallet to a decentralized exchange to swap tokens. Exchange accounts are also effectively hot, since the platform keeps operational keys online to process withdrawals quickly.

Because an internet-connected device can be compromised remotely, the standard practice is to keep only spending money in a hot wallet, similar to the cash in a physical wallet, while larger long-term holdings sit in cold storage. A common misconception is that hot wallets are inherently unsafe; a well-maintained device with a cautious user can be quite secure, but the attack surface is simply larger than for a wallet whose keys never touch the internet. The distinction is about where the keys live, not which brand of wallet you use.