Hot Wallets or Web-based wallet
A hot wallet is a web-based digital wallet that is easily accessible with access to the internet. Bitcoins are stored online in the hot wallet so that you can access them from anywhere through your smartphone or laptop.
If you are a regular cryptocurrency user or trader, you may need to use a hot wallet for convenience. A hot wallet can be accessed quickly and easily but requires a constant internet connection to work.
Hot crypto wallets can be categorized into software wallets, exchange wallets, and mobile wallets.
- Exchange Wallet - Wallets provided by crypto exchange platforms are hot wallets. In other terms, if you are storing your Bitcoin on any exchange platform, they control the custody of your digital asset.
- Software Wallet - A software wallet is a web-based wallet installed on your computer or desktop that holds the private key of your Bitcoin or any other crypto.
- Mobile Wallet - A mobile crypto wallet enables accessibility to your cryptocurrency funds through your mobile phone. It stores your crypto funds i.e., private keys to your tokens like Bitcoin in a smartphone.