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Blockchain & Crypto vocabulary · Wallets & Keys

Hot wallet

Meaning in blockchain & crypto, with examples

nounCore term

In blockchain & crypto, hot wallet means: A wallet whose keys are kept on a device connected to the internet, such as a phone app or browser extension. It is convenient for daily use but more exposed to hacking.

In Turkish: sıcak cüzdan, çevrimiçi cüzdan

How it is used

Used by both users and exchanges. An exchange keeps a small part of customer funds in hot wallets for quick withdrawals and the rest in cold storage. After a hack, news reports often say the attackers drained a hot wallet.

Example sentences

  1. Our policy is to keep less than five percent of customer funds in the hot wallet.

  2. The attackers drained the exchange's hot wallet, but cold storage was not affected.

Common collocations

  • exchange hot wallet
  • keep funds in a hot wallet
  • drain a hot wallet
  • hot wallet app
  • cold walletA wallet whose private keys are kept completely offline, for example on a hardware device or on paper, so that hackers cannot reach them over the internet.
  • walletAn app or device that stores the keys you need to access and move your crypto. The coins themselves stay on the blockchain; the wallet only holds the keys that control them.
  • custodial walletA wallet in which a company, such as an exchange, holds the private keys for you. It is easier to use and recover, but you depend on that company to give you access to your funds.
  • private keyA secret number that proves you own a wallet and lets you sign transactions. Anyone who has the private key can move the funds, so it must never be shared.
  • exploitAn attack that takes advantage of a bug or design weakness, often in a smart contract or bridge, to steal funds or make a system behave in a way its creators did not intend.

More terms: Wallets & Keys

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