Cold vs Hot Wallet
The distinction between wallets kept offline for safety (cold) and wallets connected to the internet for convenience (hot).
Definition
A hot wallet is connected to the internet, such as a phone app, browser extension or exchange balance, making it convenient for frequent transactions but more exposed to hacking, malware and phishing. A cold wallet keeps keys offline, for example on a hardware device or paper, greatly reducing remote-attack risk at the cost of convenience. A common strategy is to keep only small, actively used amounts hot and the bulk in cold storage. For gambling, funds deposited on a casino sit in the operator's hot infrastructure, which is inherently higher-risk than self-custodied cold storage.
Worked example
You hold long-term savings on an offline hardware wallet (cold) and move only a small play budget to a hot mobile wallet before depositing to a casino.
Why it matters
Frames the security-versus-convenience trade-off; it helps learners limit exposure and helps professionals design custody policy.