A cryptocurrency storage and maintenance system that is a combination of a software wallet (stored on a private computer) and a web wallet (stored on a third-party server). The bulk of the digital currency account information is stored on the wallet host’s server – except for one important detail. The private key (the code that uniquely identifies the owner) is stored only on the private device. During a transaction, the private key is encrypted on the way to the exchange’s server, so the private key is never revealed. Access to the private key also includes a password that only the owner knows.
Malone, J.A (2015). Glossary of Bitcoin Terms and Definitions. United States: Lulu Press, Inc