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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.
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
Cold storage
Cold storage means keeping private keys on something never connected to the internet, such as an offline computer, a hardware wallet or paper. Transactions are signed offline and only the signed result is carried to an online device to send.
What it means for you. Keys offline cannot be taken by online attackers, but the medium can be lost, damaged or stolen. Losing it without a backup means losing the funds for good. Keep a tested backup in a second location, and test a small transaction before moving large amounts in or out.
Sources: bitcoin.org: Secure your wallet, Electrum documentation: Cold storage, Bitcoin developer guide: Wallets, SEC Office of Investor Education: Crypto asset custody basics for retail investors · checked 4 October 2026