Hot Wallet

BlockworksJul 8, 2019 ⋅ 1 min read

Introduction

Hot wallets are a type of cryptocurrency wallet that are connected to the internet and are meant to be used for frequent transactions. They are typically the most user-friendly option, allowing easy set up and access. Examples of hot wallets include accounts held at exchanges (Coinbase, Binance, etc.) or software providers (Samourai, breadwallet etc.).

Accounts held at exchanges give control of the private keys to the custodian which means they are at risk of being hacked. Software wallets allow users to maintain their private keys, but they can still be hacked if a user's device is compromised. This also puts a user at risk of losing their private keys. Fundamentally, the choice of which wallet to use comes down to the trade-off between security and user experience.

Suggested Reading

Cold Wallet Vs. Hot Wallet: What’s The Difference - Stellabelle

Hot Wallet Vs. Cold Wallet - by Toshendra Kumar Sharma

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Outline
  • Introduction
  • Suggested Reading