What Is An HOT Wallet?

Hot Wallet: Definition

A hot wallet is a cryptocurrency wallet that is always connected to the internet
and cryptocurrency network. Hot wallets are used to send and receive
cryptocurrency, and they allow you to view how many tokens you have
available to use.

A hot wallet is a wallet that is always connected to the internet; they allow you
to store, send, and receive tokens.

Hot wallets are linked with public and private keys that help facilitate
transactions and act as security measures.
Because hot wallets are connected to the internet, they tend to be somewhat
more vulnerable to hacks and theft than cold storage methods.

When you own a cryptocurrency, you're given private keys that identify it as
yours. Public keys are similar to account usernames; they identify the wallet
so that the user can receive tokens without revealing their identity.

Private keys are similar to personal identification numbers; they allow you to access
the wallet and check balances, initiate transactions, and more. Without either
of these keys, the wallet is effectively useless.

They are different from cold wallets, which are devices or applications that
store your private keys offline—these can be an application on your device
that doesn't connect to the internet or a device that looks like a USB thumb
drive that stores your keys. To use the cryptocurrency you have in cold
storage, you need to transfer them to your hot wallet.

There are several aspects you should consider before deciding on your hot
wallet. Most important are its security features and how you use them.

Because your cryptocurrency is only as safe as the way you use it, its safety
and security depend upon how you're storing your tokens. Any items
stored in a hot wallet are vulnerable to attack because the public and private
keys are stored on the internet.