A hot wallet is a storage device connected to the internet and the blockchain network. You can use it to send, receive, and store cryptocurrency online, managing your account in real time.
A cold wallet is an offline device that stores your private keys without an internet connection. It can be an offline app on your phone, a separate data storage device, such as a USB flash drive, or even a piece of paper with the entity’s keys written on it.
It’s a common practice to store most of your assets in a cold wallet, transferring some amount to a hot wallet, when needed. This way, you can keep your funds safe and isolated from the Internet, while still being able to get online and make transactions.