Cryptocurrencies are taking over the world by storm, and there’s no denying that almost every person will have their share of crypto in the upcoming years.
Did you know that cold storage wallet is the safest option for storing your crypto? Cold storage wallet is responsible for removing crypto keys from the wallet and storing them somewhere offline where there can be zero security breaches. Now that you have a mild idea about cold storage
wallet, read ahead to know whether it’s a safe option.
What is Cold Storage?
- How exactly does a crypto wallet work to keep your currency safe?
- Different types of cold storage wallet options for you to look out for.
- Whether you choose a hot wallet or a cold wallet?
- Which is the best wallet for your crypto?
Getting Started: How Does Crypto Cold Wallet Work
To first understand the cold wallet, you need to understand the importance of a wallet. Its function is similar to a physical wallet that holds cash. Both the wallets are not safe because there’s always a chance that a thief might steal them. While a physical can be taken out of your pockets, a cyber thief can also pull off the same but breach the security and rob you of your cryptos.
Now, this is where a cold wallet enters this scenario. The cold wallets secure the crypto keys, and the wallet has both public and private keys to access. Now for people who wonder what this key is that we are talking about, cryptographic characters are necessary to initiate the transfer of cryptocurrency from or to any wallet.
When it comes to a cold wallet, you will store your crypto’s keys in an offline wallet that will not be connected to any device or network to save it from cyber-attacks. Many people or investors that own a huge amount of crypto divulge in the cold wallet.
Cold wallet is basically a hardware device, for example, a USB where one can store all the keys, take them anywhere they want, and store them safely. The cold wallets are safe enough and are impossible to hack. However, it can quickly become a tragedy if you lose the device or damage it somehow.
Going In-Depth: Understanding the Different Types of Cold Storage Wallet
Some cold storage wallet are secure, while some are ultra-secure, keeping your crypto safe from anyone’s reach. However, it depends on you and which one you prefer to trust. Here are the different types of cold storage wallets-
These are similar to USB drives, and you can plug them in to access them. As mentioned before, these are one of the safest methods to secure your cryptocurrencies. You can invest in any of them, from a standard USB to a USB with Bluetooth or software installed. Check out their features while getting one.
Deep cold storage wallet
It is one of the ultra-secure ways to keep your crypto safe, considering it takes a lot of effort to get in to access your crypto. Deep cold storage wallet requires multiple attempts to access. It can be of any form. You can put your cold wallet in the vault at a bank or put it somewhere secure where it can’t be accessed by anyone but you. The only drawback is, don’t forget where you have kept it.
You will have to print your keys and get a QR code to scan to access your crypto whenever required in a paper wallet. However, since the QR code stores all your information, you will have to keep this paper wallet safe and not lose it, or anyone can retrieve the crypto you have stored.
These are safe but extremely expensive ways to secure your crypto keys. This involves recording your keys in the sound format and encrypting them in CDs or vinyl. You can access it using a spectroscope app or such.
Did you know?
In 2013, a Wales resident named James Howells threw his digital wallet containing 7,500 bitcoins. Upon learning the value of those bitcoins later in life, he is now requesting the city council to let him excavate the area to find his drive. Weird, right?
Cold Wallet Vs Hot Wallet: Which One Should You Choose?
Now, this is the most important question that you should be asking! You already know what cold wallets are, but what is this hot wallet? Hot wallet is a digital wallet and has been in the market since the beginning.
There are two different types of hot wallets- desktop and web wallets. Though hot wallets include mobile wallets, considering they can be moved, it is considered a hybrid wallet. To give you a fair idea, here are the pros and cons of both the hot and cold wallet for you to make your decision-
Remember these three key aspects while making a decision-
- Ease of access
Cold Wallet Vs Hot Wallet Pros and Cons-
|Hot wallet is connected to the internet.||Being connected to the internet can result in cyber attacks.|
|Cold Wallet is an external device that is not connected to the internet.||The main priority is to keep the device safe from any damage or you may lose your currencies.|
|Cold wallets are mobile. You can take them wherever you go.||Hot wallets are digital and can be accessed from anywhere, again making it easier for cyber theft.|
|Cold wallets offer greater security levels.||You will have to remember all the information to be able to access it.|
|Cold wallets are a bit expensive as they offer various levels of protection making it less vulnerable to cyber attacks.||Hot wallets are free to use and can be easily found on the internet but with increasing cyber crimes, you will never know who is planning to access it.|
Best Wallet for Your Money, Your Digital Money
Having a crypto coin is extremely necessary for trading, selling, and more. Even if you want to keep your cryptocurrency safely, you must have a wallet, and so far, we have given you enough reasons to invest in a cold wallet. Here are the best cold wallets for your cryptocurrency-
- Ledger Nano X
If you want to safely store a huge amount of crypto in one location, then Ledger Nano X should be your go-to. With this second generation cold wallet, you can exchange and manage your crypto from your mobile phone regardless of the platform. The wallet also has software to live check your currency and supports over 1,800 tokens and coins such as ETH, BTC, TRX, ADA, etc.
- CoolWallet Pro
The DeFi cold wallet is easy to use and offers a lot of safety. You can connect it with any device with any internet access. It also easily interacts with NFT and Dapp. The waterproof tamper-free device has a lithium-ion battery and offers multi-layer safety. The supported coins are XRP, Cardano, ERC20, Tezos, BTC, etc.
- Keystone Pro
The air-gripped crypto wallet comes with an open-source firmware fingerprint sensor and provides an extra layer of safety to keep your currency safe from cyber hacks. You can also integrate the Keystone Pro with the QR code. There are detachable batteries for you to save the device from corrosion. It supports DOT, DOGE, POLYGON, LTC and more currencies.
Word to Remember
The cryptocurrency started as a joke, but people started investing in it after Elon Musk tweeted about the DOGE.
On an ending note
If you are investing in cryptocurrency, you should invest in a cold wallet to keep it safe from cyber attacks. Even though there are multiple layers of security available on the internet, hackers are becoming more sophisticated in hacking as there are always cases such as those coming up. A cold wallet will keep your crypto extremely safe, considering you keep it safe.
Frequently Asked Questions (FAQs)
Cold wallet is one of the safest options for storing crypto away from cyber-attacks; hence, maximum crypto investors keep the keys in cold storage.
Cold wallets offer numerous features and layers of security to keep the keys safe and sometimes are a little expensive. There are different brands and options in the market to dabble in and select the best one for yourself.
Yes, you can create a backup of your hardware wallet for safekeeping. For this, you will have to write down the phrase of 24 words on the card they give, and you can keep it safe.
This depends upon the level of safety layers your device protects and whether you keep it away from the internet or not. Though they are not easily vulnerable to cyber attacks, the hacker will have to get hold of the drive before they get in.
Compared to any standard device, the specialized ones can last for about 20 to 25 years safely.
Read more about Hardware Wallet.