Bitcoin Hot Wallets
How They Work, Best Practices, and When to Use Them
What Is a Bitcoin Hot Wallet?
A Bitcoin hot wallet is a wallet that remains connected to the internet, making it convenient for sending and receiving Bitcoin quickly. Hot wallets store your private keys in software — often on your phone, desktop computer, or via a web-based interface. While this provides ease of access, it also means they are more exposed to online threats compared to offline storage methods like hardware or paper wallets.
When Is a Hot Wallet a Good Choice?
- Everyday Spending - Quick and convenient for frequent transactions.
- Small Balances - Storing amounts you are comfortable risking online.
- Testing & Learning - Ideal for experimenting with Bitcoin.
- Integration with Services - Connecting with exchanges, apps, or payment tools.
Best Practices Checklist
- ✅ Only keep small amounts for spending in a hot wallet.
- ✅ Enable two-factor authentication (2FA) where possible.
- ✅ Use strong, unique passwords for wallet access.
- ✅ Consider wallets that support multisig for enhanced security.
- ✅ Use a passphrase in addition to your seed phrase for extra security.
- ✅ Keep your wallet software updated to the latest version.
- ✅ Backup your seed phrase offline in a secure location.
- ✅ Avoid accessing your wallet over public Wi-Fi without a VPN.
Risks and Limitations
Hot wallets, by design, are connected to the internet — this convenience comes with security trade-offs. Understanding these risks is essential:
- Hacking & Malware: Online attackers may target hot wallets through phishing or malicious software.
- Exchange Risks: If you store Bitcoin in a custodial hot wallet on an exchange, you depend on their security.
- Device Compromise: If your phone or computer is compromised, your keys could be stolen.
Our Top Picks - Mobile Wallets
Nunchuk Wallet
A modern mobile wallet with multisig support, PSBT workflows, and integration with hardware wallets for advanced security.
BlueWallet
A popular Bitcoin and Lightning mobile wallet with strong privacy options and hardware wallet compatibility.
Our Top Picks - Desktop Wallets
Sparrow Wallet
Advanced desktop wallet offering coin control, multisig, and full PSBT support for secure and private Bitcoin transactions.
Specter Wallet
Desktop wallet designed for multisig setups, hardware wallet integration, and complete control over your Bitcoin transactions.
Other Popular Hot Wallets - Mobile
Muun Wallet
User-friendly Bitcoin and Lightning wallet with a strong focus on security and ease of use.
Phoenix Wallet
A non-custodial Lightning wallet with instant payment capabilities and simple onboarding.
Zeus Wallet
Mobile wallet tailored for managing Lightning nodes and on-chain transactions.
Samourai Wallet
Privacy-focused Bitcoin wallet with CoinJoin and other advanced privacy tools.
Other Popular Hot Wallets - Desktop
Electrum
One of the oldest Bitcoin wallets with advanced features and multisig support.
Wasabi Wallet
Privacy-oriented desktop wallet with built-in CoinJoin support.
Bitcoin Core
Official Bitcoin full node client with wallet functionality for maximum security and decentralization.
Fully Noded
macOS wallet app for managing Bitcoin Core and hardware wallets with full privacy.