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What is a hot wallet?
A hot wallet is a wallet whose keys sit on a device connected to the internet, such as a phone app, desktop program or browser extension. It is quick to use for sending and connecting to apps, but the keys are reachable by anything that compromises that device.
What it means for you
Malware, a fake app or a malicious website prompt can take funds from a hot wallet in seconds, and the loss cannot be reversed. Many holders keep only spending amounts in one, like cash in a pocket. Check the app's publisher before installing and read each approval request before signing.
How it works
The keys, or the seed they come from, are stored on an internet-connected device, ideally encrypted with a password, and used on that same device to sign. Whatever gains control of the device, such as malware or a fake app, can therefore create and sign transactions too. Bitcoin developer documentation calls wallets that generate keys, sign and broadcast in one program full-service wallets, and notes that this design exposes the private keys on an internet-connected device. SEC staff describe hot wallets as convenient for transactions but exposed to cyberthreats.
Sources: bitcoin.org: Secure your wallet, ethereum.org: Ethereum wallets, Bitcoin developer guide: Wallets, SEC Office of Investor Education: Crypto asset custody basics for retail investors · checked 4 October 2026
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Educational content, not financial advice. Written by hand and checked against the source named above. Something wrong? Tell us and we reply within two business days.