What is the difference between a hot wallet and a cold storage wallet?

The difference between a hot wallet and a cold storage wallet lies in their connection to the internet and their respective security levels:

1. **Hot Wallet:**
   - A hot wallet is a cryptocurrency wallet that is connected to the internet and actively used for storing and transacting cryptocurrencies.
   - Hot wallets are typically used for day-to-day transactions, trading on exchanges, and providing liquidity on decentralized finance (DeFi) platforms.
   - While hot wallets offer convenience and accessibility, they are more susceptible to hacking, theft, and unauthorized access compared to cold storage wallets.

2. **Cold Storage Wallet:**
   - A cold storage wallet is a cryptocurrency wallet that is not connected to the internet, keeping the private keys and funds offline for added security.
   - Cold storage wallets are used for long-term storage of large amounts of cryptocurrencies, such as savings or investment holdings.
   - By keeping funds offline and disconnected from the internet, cold storage wallets offer a higher level of security and protection against online threats, such as hacking, malware, and phishing attacks.
   - Common forms of cold storage wallets include hardware wallets (e.g., Ledger Nano S, Trezor), paper wallets (printed or written down), and offline computer or air-gapped wallets.

In summary, the primary difference between a hot wallet and a cold storage wallet is their connection to the internet and their respective security levels. Hot wallets are online wallets used for active transactions, while cold storage wallets are offline wallets used for secure long-term storage.