So I sometimes hear that the outlet has a smaller hole for hot and larger for cold so its harder to stick your finger in hot. But if it is an AC wave, shouldn't they both be the same, because they get 50% of pos. and neg? What exactly does Hot and Cold mean on an AC outlet and does it have something to do with ground? (ex: you touch hot and it goes through your body to ground and gives you a shock)
In the USA
One thing that the other answers did not cover, the line coming in to your house is actually 3 lines from a transformer with a center tap. That center tap is the "cold" and the two ends are both "hot", to get 120 you go from the center to one of the ends and to get 240 you go from end to end
In your breaker box it alternates which end is available each line, that is why 240 breakers are two wide, it is connecting the two ends together instead of the middle and the end.
Similar principles apply with the following major differences
- Most households are supplied with a single phase of 230 V AC
- A three phase, four wire (+ protective ground), star topology network is commonly used.
- The wiring colours are different (below for Netherlands, probably other countries too).
- green/yellow striped is protective earth.
- brown is live supply
- black is switched live
- blue is neutral return.
More appropriate terms would be "live" and "neutral".
The live is actually excited with a signal waveform from the power company, so if you say plug a multimeter into the ground (literally the ground) and the live hole you'll voltage difference. Because there's a voltage between the live and ground, current can flow through you if you stick your finger in (assuming you're electrically connected to the ground). If you're not electrically connected to ground, or more specifically you're only connected to the potential of the live wire you're perfectly safe* because electricity needs a potential difference to flow. This is why birds can land on powerlines and be just fine.
This does not happen with the neutral, so there should be no significant electric potential between the neutral and literal ground. Because there's no significant voltage, touching the neutral is safe* because no current flows.
*note: For safety reasons though, I would not recommend sticking your finger or a screwdriver into the supposed neutral hole, or hanging off of powerlines. You never know if if you might accidentally touch the live wire (say from a poorly wired up outlet) or complete the circuit by brushing your leg against a tree branch, among many different things which can go wrong. It's better to not take the chance. Turn off power to circuit breakers before mucking around with outlets, and unplug appliances before trying to service them (or better yet, get a trained professional to do it for you).
As others have noted, in the USA it is common to have two anti-phase power supply wires, both of which are called "hot" but must remain electrically disconnected from each other. The "neutral" wire should always be halfway between them, and will typically not deviate much from ground voltage. Accidental contact with the neutral wire is less likely to be harmful than accidental contact with a hot wire, but should not be considered "safe".
Although the neutral wire is generally at about the same potential as the safety-ground wire, it serves a very different purpose. The current flowing through the neutral wire of a cable should be equal and opposite to the current flowing through the hot wire (or, if both anti-phase hot wires are present in a cable with a shared neutral, the sum of the hot currents should be equal and opposite to the current in the neutral wire). If 14.371 amps are flowing out through the hot wire, 14.371 amps should be flowing back in through the neutral wire. The safety-ground wire should be capable of sourcing or sinking considerable current, but outside of fault conditions the actual current in it should be essentially zero.
One useful safety invention of the last century is the ground fault circuit interrupter (so-called in the USA; I think other countries use the term "residual current detector"). It continuously monitors the current in a hot-neutral pair and ensures that the current in each wire is equal and opposite that of the other. If the two currents differ by much, the device will assume that current is flowing into or out of the circuit through some other path (possibly going through a person) and will disconnect power.
"Hot" is the side connected (ultimately) to the power plant. The power plant drives the "hot" line above (and below) "ground" potential.
Here is the equivalent DC schematic:
Notice how it doesn't matter what you connect to the cold side if the switch is open.
In your example, the switch is actually the open outlet and the DC source is replaced with an AC one...
Why "Cold" is Cold:
It's perhaps more illustrative to think of the "hot" wire as the one which deviates from neutral (ground).
In an open circuit, no current flows normally through the circuit. The risk is that you, by touching one of the wires, could complete the circuit by providing a pathway through your body.
Since you will be near ground potential, contact with a wire at ground potential is substantially safer than contact with a wire far away from ground potential. That's why we call the neutral "cold".
Your intuition is correct about polarity. The current would flow through you in different directions during the different halves of the AC cycle (if you touch hot and provide a pathway).
In the US, the terms are usually "Hot" and "Neutral". Neutral is bonded (connected) to ground (called "earth" in some countries), usually at the breaker box, and therefore has minimal to no potential compared to ground at the outlet. A test lamp connected from hot to ground will light the same as if it were connected hot to neutral (on a ground fault circuit, however, it will trip the breaker if connected to ground). A test lamp connected from neutral to ground will not light.