Glossary
Hot wallet
A hot wallet is a crypto wallet whose private keys are stored on a device connected to the internet, such as a phone app, desktop program or browser extension. It is convenient but more exposed to hacking.
Also called Software wallet, Online wallet, Mobile wallet, Browser wallet, Web3 wallet
See also
A hot wallet is any crypto wallet that keeps its private keys on a device connected to the internet. Mobile apps, desktop programs and browser extensions such as MetaMask, Phantom, Trust Wallet or Exodus are hot wallets, and so are the accounts you hold on an exchange. The name contrasts with a cold wallet, which keeps keys offline.
How a hot wallet works
The wallet generates a seed phrase and private keys, encrypts them on the device and unlocks them with a password, PIN or biometrics. Because it is always online, it can show balances in real time, sign transactions in a tap and connect directly to decentralised applications: a decentralised exchange, an NFT marketplace, a staking protocol. On a custodial hot wallet, such as an exchange account, the company holds the keys on its own servers.
A concrete example
Lena wants to swap $50 of USDC for SOL on a decentralised exchange. She opens her browser extension, connects to the app, reviews the swap and approves it. The wallet signs the transaction with the key stored on her laptop and the swap settles within seconds. Doing the same with a hardware wallet would work, but would take a few more steps.
Why it matters for users
Hot wallets are the everyday gateway to crypto: free, quick to set up and needed for most DeFi activity. Many users combine a hot wallet holding a small spending balance with a cold wallet for savings, much like a purse and a safe.
Risks and good practice
Being online makes hot wallets the main target of attacks:
- Phishing sites and fake apps that imitate real wallets to steal the seed phrase.
- Malicious approvals: signing a transaction that lets a contract spend your tokens.
- Malware on the device, including programs that swap copied addresses.
- Exchange hacks or failures for custodial hot wallets.
Install wallets only from official links, keep only what you need in them, read what you sign, revoke unused token approvals and never share your seed phrase. Our guides Crypto wallets explained and How to avoid crypto scams cover these points in depth.