What is a hot wallet?

A hot wallet is a crypto wallet that stays connected to the internet, letting you store, send, and receive coins directly from an app or exchange account. It matters because that connection makes hot wallets convenient for everyday spending and trading but more exposed to hacking than offline storage. The natural follow-up: should you keep everything there? Most people keep a small working balance in a hot wallet, like $200 in MetaMask for buying NFTs or swapping tokens, and move larger holdings to a cold wallet, a device disconnected from the internet, for safekeeping. Exchange accounts on Coinbase or Binance are also hot wallets by this definition, since the platform controls keys tied to an online server. Losing your password or falling for a phishing link is the main risk with any hot wallet.