What Are Hot Wallets In Bitcoin?
A hot wallet is an online interface that manages Bitcoin keys, allowing transactions over the internet. This digital tool, continuously connected to the internet, can be web-based or an app on mobile or desktop devices. Users interact with their Bitcoin through these wallets by accessing private keys, the digital codes that enable Bitcoin control. While hot wallets offer swift and easy access to Bitcoin, they're more susceptible to cyber threats. Two main categories exist: Custodial wallets, where providers like exchanges retain control over the user's private keys, and Non-custodial wallets, where users exclusively hold their private key, backed up by a recovery phrase. For security, experts advise limiting Bitcoin amounts in hot wallets and practicing cautious online behavior.