A hot wallet is a crypto wallet that's connected to the internet—usually an app on your phone or software on your computer. It's convenient for everyday use, but less secure than a cold wallet because hackers could potentially access it online.
Why It Matters
Hot wallets are perfect for small amounts you want to spend or move frequently (like $50-500). But for serious savings, you should use a cold wallet or hardware wallet instead.
Example
Think of your crypto storage strategy like cash:
- Hot wallet = wallet in your pocket → Keep $100 for daily spending
- Cold wallet = safe at home → Keep $10,000 in savings
You wouldn't walk around with $10,000 in your pocket. Same logic applies to crypto.
Popular Hot Wallets
- Exodus – Beautiful design, beginner-friendly, desktop + mobile
- Trust Wallet – Mobile-only, supports many coins, owned by Binance
- MetaMask – Best for Ethereum/NFTs, browser extension
- Coinbase Wallet – Different from Coinbase exchange, self-custody
Common Mistakes Beginners Make
- ❌ Storing large amounts in hot wallets (hacking risk)
- ❌ Not backing up recovery phrase
- ❌ Downloading fake wallet apps (check developer carefully)
- ❌ Storing recovery phrase in cloud (defeats the purpose)
- ❌ Using hot wallets on public WiFi
Security Checklist for Hot Wallets
- ✅ Only keep small amounts you're willing to lose
- ✅ Back up recovery phrase offline (paper, not cloud)
- ✅ Enable biometric lock (fingerprint/face)
- ✅ Only download from official sources (App Store, official website)
- ✅ Never use on public WiFi without VPN
- ✅ Check developer name before installing
Related Terms
- Cold Wallet – Offline alternative (more secure)
- Hardware Wallet – Physical device (most secure)
- Recovery Phrase – Backs up your hot wallet
- Exchange – NOT a wallet (they control the keys)