Hot and cold wallets: the difference in one picture

A hot wallet keeps its keys on a device connected to the internet: a phone app or a browser extension (sample note).

A cold wallet keeps them offline, on a small dedicated device or even on paper. Signing a transfer takes longer, but the keys are never exposed to a website.

Many people use both: a hot wallet for small amounts and a cold one for the rest. Either way, the seed phrase is what really needs protecting.