A crypto wallet is a tool—software or hardware—that stores the private keys needed to access and manage digital assets. Wallets come in three main categories based on how they connect to the internet and their level of security.
Hot Wallets are always online (e.g., mobile, browser, or exchange wallets). They offer convenience and quick access for trading but are more exposed to hacks.
Warm Wallets are semi-connected—typically desktop or mobile apps used for periodic transactions. They balance accessibility with improved security.
Cold Wallets remain completely offline, such as hardware wallets or paper backups. They provide the highest protection against theft or malware and are best suited for long-term asset storage.
An effective strategy often combines all three, using hot wallets for daily activity, warm wallets for medium-term operations, and cold storage for long-term holdings.