Hot Wallet
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A hot wallet is a cryptocurrency wallet that is connected to the internet. Private keys are stored on an internet-connected device, making hot wallets convenient for daily use but more exposed to online threats compared to hardware wallets.
Types of hot wallets
Software wallets (desktop / mobile)
Applications installed on a computer or phone. The private key is stored locally, encrypted by a password.
- Examples: Exodus, Electrum, MetaMask, Trust Wallet
Exchange wallets (custodial)
The exchange holds the private key on your behalf. You access funds via login — you don't control the key directly.
- Examples: Binance, Coinbase, Kryptex
Browser extension wallets
Used for interacting with DApps and DeFi protocols directly from a browser.
- Examples: MetaMask, Phantom
Hot wallet vs. hardware wallet
| Property | Hot wallet | Hardware wallet |
|---|---|---|
| Connected to internet | Yes | No |
| Convenience | High | Lower |
| Security | Moderate | High |
| Cost | Free | $50–$200 |
| Best for | Daily use, pool payouts | Long-term storage |
Relevance to miners
Mining pool payouts are typically sent to a hot wallet address. Most miners use a software or exchange wallet for receiving payouts, then move larger amounts to a hardware wallet for safe long-term storage.
