A hot wallet refers to a crypto wallet that is online and connected in some way to the Internet. It is a term associated with crypto tokens that are not being kept in cold storage.Exchanges that are able to pay out withdrawals instantly can be said to be paying them from a hot wallet. The term can also be used loosely to refer to keeping bitcoins in an exchange where they can be withdrawn on demand. Crypto exchange software that employ a hot wallet need to be extra careful. Operating a hot wallet is also a risk to its owner, because most computer systems have hidden vulnerabilities of some sort that can eventually be used by hackers or malware to break into the system and steal the bitcoins.Keeping large amounts of bitcoins in a hot wallet is a fundamentally poor security practice. Most, if not all of the crypto losses incurred in all the known hackings in Bitcoin history can be attributed to funds kept in hot wallets.Exchanges built using Reputable bitcoin exchange script's like Blockchain Scripts, also offer API for cold storage transfer. Such exchanges that practise hot wallet storage, need a refined process for regular transfer of assets to cold wallets. The Cryptocurrency trading script provided by Blockchain Scripts offers an algorithm on demand to calculate and do such transfers based on the usage. This usage needs to be anticipated by the exchange owners before hand.