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Online Storage Meaning

Also known as a Hot Wallet. This refers to storing cryptocurrency private keys on a device or service that is connected to the internet.

This includes mobile wallets, desktop wallets, and exchange-hosted wallets. The primary advantage of online storage is convenience.

It allows for instant access to funds for trading, payments, or DeFi interaction. It is necessary for high-frequency trading and active dApp usage.

The primary risk is security. Being online makes these wallets susceptible to malware, phishing, and remote hacking.

Best practice dictates that one should keep only a small percentage of their net worth in online storage-just enough for daily needs-while the bulk remains in offline (cold) storage.

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