Definition
A cryptocurrency wallet that is connected to the internet, providing convenient access for frequent transactions. Examples include mobile wallets, browser extensions, and exchange wallets.
Why It Matters
Hot wallets are convenient but more vulnerable to hacking. Understanding the trade-offs between convenience and security is essential for managing crypto assets.
Example
A trader keeps a small amount of ETH in their MetaMask hot wallet for daily DeFi interactions while storing the majority in cold storage.
Related Terms
Cold Wallet
Wallet
Seed Phrase