Because of their simplicity, these are the most popular crypto hot wallets. When you purchase cryptocurrency through a third-party app such as Coinbase, the currency is automatically stored in a hosted wallet. These are referred to as hosted because the service provider stores your cryptocurrency for you. Keeping your cryptocurrency in a hosted wallet is a great option for people who frequently forget their passwords because the host will keep your cryptocurrency even if you lose your private keys. When you keep your cryptocurrency in a hosted wallet, you will not be able to use all of its features.

Hosted wallets are a type of cryptocurrency wallet that stores users' private keys and other sensitive information on a third-party server or platform. Unlike non-custodial wallets, where users have full control over their private keys, hosted wallets are managed by external service providers. These wallets are often offered by cryptocurrency exchanges or online wallet services, making it convenient for users to access their digital assets through a web interface or a mobile app.

While hosted wallets offer ease of use and accessibility, they come with certain security considerations. Users must trust the security measures implemented by the hosting service, as a security breach or the service provider's insolvency could potentially compromise their funds. It's crucial for users of hosted wallets to prioritize platforms with robust security features, such as two-factor authentication and encryption, and to be aware of the trade-offs between convenience and control when selecting a wallet solution.