Clear DefinitionsHot Wallet
Pronunciation
[hot woll-it]
Analogy
A hot wallet is like cash in your pocket—readily spendable but vulnerable if you’re mugged.
Definition
Any wallet connected to the internet (software, web, or mobile) that stores private keys online, enabling quick transactions but increasing exposure to cyber‑threats.
Key Points Intro
Hot wallets trade security for convenience via:
Key Points
Online access: Immediate transaction capability.
User control: Non‑custodial hot wallets keep keys with user.
Integration: Works seamlessly with DApps and exchanges.
Backup required: Seed phrases protect against device loss.
Example
MetaMask is a hot wallet—connected to websites to sign Ethereum transactions in real‑time.
Technical Deep Dive
Hot wallets maintain encrypted key stores in browser or app memory. They sign transactions via injected web3 providers or local RPC calls. Session management and timeouts mitigate unauthorized use.
Security Warning
Hot wallets are prime targets for phishing, keyloggers, and XSS; use only for small funds.
Caveat
Never store large balances in hot wallets; move to cold storage for long‑term holdings.
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