Warm wallets are digital asset storage systems that function like “hot wallets.” Their main difference is that they are usually software that is downloadable, unlike the hot wallets offered by most exchanges.
Moreover, a warm wallet usually requires the use of 12-digit passcodes or PIN numbers for its user authentication mechanism. Hot wallets depend on passwords set by users coupled with other user verification tools.
Like other wallets, warm wallets can be used to perform blockchain transactions such as peer-to-peer transfers. Its distinction from hot wallets is that they offer better security and stronger access controls.
There are also warm wallets that are hardware-based, like Cybavo client the CoolWallet S, which offers both offline cold storage as well as the ability to transact with the phone’s app. These are devices that generate private keys and/or recovery seeds offline, perform transaction signatures and broadcast them to the blockchain network through a host device connected to the internet.