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Fox Periodical
Glossary

Hot Wallet

Plain-language definition

A hot wallet is a crypto wallet whose private keys are stored on an internet-connected device — a phone, browser extension or exchange account — making funds quick to access.

How it works

Because the keys live on a connected device, a hot wallet can sign and broadcast transactions instantly without extra steps. That connectivity is its convenience and its weakness: anything online is reachable by malware and phishing in a way that an offline cold wallet is not.

Why it matters

Hot wallets are well suited to the funds you use regularly, much like cash in a pocket, while larger long-term holdings are usually safer in cold storage. A common practice is to split holdings between a small hot wallet for spending and cold storage for savings.

Example

A mobile wallet app you use to pay for things day to day is a hot wallet.

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