A wallet that is always connected to the internet and cryptocurrency network. They are primarily used to send and receive cryptocurrency or NFTs. They can store, send and receive tokens. People normally use a hot wallet for minting NFTs and connecting to online sites. Metamask is an example of a Hot Wallet. As your hot wallet is connected to the internet and cryptocurrency networks, it is at a higher risk of hacks and attacks than other wallets.
How to keep a hot wallet safe
Generally, it is best practice to keep only small amounts of crypto in a hot wallet, just enough to manage the transactions and to allow for proper usage. Like with anything connected to the internet, hot wallets are at risk from scams and hack attempts. Do not click on any links you find suspicious, or you don’t completely trust. Occasionally, items are sent anonymously to your wallet that may also be dangerous if interacted with, and you should ignore these items too.
A cold wallet is a physical token that acts as the main storage for any crypto assets that you will not be using for an extended period of time. As the name suggests, they are rarely touched, and so are ‘cold’. Cold wallets provide a way of holding your cryptocurrencies offline, and provide your assets with greater protection and security. The commonly use cold wallet brands are Ledger and Trezor.
How to keep a cold wallet safe
Cold wallets are meant to be kept cold. You shouldn’t connect them to the internet, and they should be used to store your assets that are not in use. Make sure you buy your cold wallet from a reputable seller - second hand is a no-no, and keep your passwords and seed phrases safe and backed up on paper.