Hot or cold? Start with the keys.

Your wallet is not a box of coins

Crypto assets are recorded on the blockchain. A wallet helps you interact with them. Private keys authorize transactions; protecting them is different from protecting a picture of your balance. Investor.gov: custody basics.

Hot and cold describe key handling

A hardware wallet is designed to sign inside a separate device, then return the signed transaction to an online app. The app can communicate with the network without receiving the private key. Trezor: how hardware signing works.

Custody asks a different question: who controls the keys?

Self-custody

You manage the keys and their recovery arrangements.

Third-party custody

A provider controls the keys. Its storage can be hot, cold or a mixture. Its use of cold storage does not give you control of those keys.

These are separate choices, with separate responsibilities and risks. Investor.gov: self- and third-party custody.

Try it without a transaction

Fictional example: Sam uses an online app with a separate signing device. Lee uses a service that advertises cold storage.

For each setup, ask: who controls the keys, and where are they stored and used?

Sam’s online app alone does not answer the key-storage question. Lee’s cold-storage label alone does not answer the custody question. Neither description is enough to decide the whole setup is safe.