In crypto, security comes down to one thing: who controls the private keys. A wallet is simply the tool that stores those keys, and wallets fall into two broad camps.
Hot wallets
A hot wallet is connected to the internet — a phone app, a browser extension, or an exchange account. Hot wallets are convenient for spending and trading, but being online makes them a bigger target for attackers.
Cold wallets
A cold wallet keeps your keys offline, for example on a dedicated hardware device. Because the keys never touch an internet-connected computer, cold storage is much harder to compromise and is well suited to long-term holdings.
Practical safety steps
- Use a hot wallet only for what you need day to day; keep larger amounts in cold storage.
- Back up your recovery phrase offline and never type it into a website.
- Remember that on an exchange, the platform holds your keys — “not your keys, not your coins.”
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