Wallets that are connected to the internet and store your coins online are called hot wallets. Hot wallets are convenient to use but they are not the most secure. As they are connected to the internet they are vulnerable to hackers. It’s fine to keep a small amount of coins on hot wallets for a short period of time. A hacker wouldn’t bother to waste his resources for a small fund. But if you have heavily invested in cryptocurrencies, you will need a more secure wallet.
There are three types of hot wallets:
- Online wallets (aka web wallets or cloud wallet)
- Desktop wallets
- Mobile wallets