Word of the Day | Hot Wallet

Word of the day -  HOT WALLET

A "Hot Wallet" (or Soft Wallet) is the opposite of a cold wallet in the world of cryptocurrencies.

A hot wallet refers to a wallet that is connected to the internet and accessible online. It can be a software application or a web-based service that allows you to store and manage your digital assets on the internet.

Think of a hot wallet like your regular wallet that you carry around to make everyday transactions. It is easily accessible and convenient for frequent use. Similarly, a hot wallet allows you to quickly access and use your cryptocurrencies for online transactions, trading, or transfers.

However, because a hot wallet is connected to the internet, it is more susceptible to potential security risks. Hackers or malicious actors who gain access to the internet can target hot wallets, potentially putting your funds at risk. To mitigate these risks, it is crucial to take additional security measures when using a hot wallet, such as using strong passwords and enabling two-factor authentication (2fa).

It's generally recommended to keep only a small amount of funds in a hot wallet for everyday use, while larger amounts are stored in a more secure cold wallet.

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