More Examples

“The good bitcoin exchanges only keep a small amount of BTC in a hot wallet.”

“Gonna move my bitcoin from a hot wallet to cold storage.”

“‘Hot wallet‘ means ‘a Bitcoin wallet somehow connected to the Internet.'”

Definition(s) from the Web

  1. A hot wallet refers to a Bitcoin wallet that is online and connected in some way to the Internet. It is a term that refers to bitcoins that are not being kept in cold storage. Bitcoin-related services and exchanges that are able to pay out withdrawals instantly can be said to be paying them from a “hot wallet”. The term can also be used loosely to refer to keeping bitcoins in an exchange where they can be withdrawn on demand. Its real-world analogy is keeping cash on person: easy access, but greatest risk of unrecoverable theft in the event of an attack. Operating a “hot wallet” is also a risk to its owner, because most computer systems have hidden vulnerabilities of some sort that can eventually be used by hackers or malware to break into the system and steal the bitcoins. Keeping large amounts of bitcoins in a hot wallet is a fundamentally poor security practice. Most, if not all of the Bitcoin losses incurred in all the known hackings in Bitcoin history can be attributed to funds kept in hot wallets. Most reputable services offering Bitcoin withdrawal of some sort will keep a very limited number of bitcoins in a hot wallet to enable immediate withdrawals of small/typical amounts, but will require a delay and manual activity to process a larger withdrawal, as the bitcoins are retrieved from other storage. Source
  2. A digital wallet also known as “e-Wallet” is an electronic device, online service, or software program that allows one party to make electronic transactions with another party bartering digital currency units for goods and services. This can include purchasing items on-line with a computer or using a smartphone to purchase something at a store. Money can be deposited in the digital wallet prior to any transactions or, in other cases, an individual’s bank account can be linked to the digital wallet. Users might also have their driver’s license, health card, loyalty card(s) and other ID documents stored within the wallet. The credentials can be passed to a merchant’s terminal wirelessly via near field communication (NFC). Increasingly, digital wallets are being made not just for basic financial transactions but to also authenticate the holder’s credentials. For example, a digital wallet could verify the age of the buyer to the store while purchasing alcohol. The system has already gained popularity in Japan, where digital wallets are known as “wallet mobiles”. A cryptocurrency wallet is a digital wallet where private keys are stored for cryptocurrencies like bitcoin. Source

See Also

Cold Storage / Cold Wallet


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