What is a cold wallet?

Since crypto-currencies were introduced, the secure storage of these assets has become more important than ever. With the rise of internet trading and new technologies, the use of a cold wallet to store cryptocurrencies has increased. Today, we're going to find out together how a cold wallet can be used to protect your information and financial assets from the risks associated with an internet connection.

Definition

The cold wallet is a type of offline storage specially designed for the digital security of crypto-currencies. It allows users to generate and store their private keys securely, without being connected to the Internet.

Cold wallets are often compared with hot wallets, which offer an Internet connection and allow users to carry out transactions immediately.

Comparison with warm portfolios

Hot wallets, which remain connected to the Internet, offer greater flexibility, as they can be used to carry out transactions immediately. However, this ease of use is also synonymous with less security, since the risk of falling victim to a computer attack is very high if the system is exposed to Internet hackers.

Advantages and disadvantages of a cold wallet

Safety

As it is stored offline, a cold wallet is significantly more secure than a hot wallet because there is no direct connection to the Internet, which means that the assets stored in it cannot be compromised by a computer attack.

Need for a physical device

A cold wallet requires optimum use of a physical device such as an external hard drive or USB key to create a complete and secure backup of stored information and assets.

No immediate transaction option

As it is not connected to the Internet, the cold wallet does not offer the option of immediate transactions. Users must therefore be prepared to invest time in transferring private keys to a device connected to the Internet before they can carry out a transaction.

Who are the main cold wallet providers?

There are a number of solutions available on the market that can help you secure your digital assets. Here are some of the best options:

Trezor

Trezor is a cold physical wallet that stores private keys securely offline, allowing users to monitor their crypto currency assets without fear.

BitLox

BitLox is a platform for storing crypto-currencies that offers additional security through the use of a customisable PIN code and a robust physical medium for storing private keys.

KeepKey

KeepKey is a cold mobile storage solution designed specifically to protect and manage users' crypto-currencies.

How do I choose a cold wallet?

Understanding the safety process

Cold wallets offer better protection than online wallets, as no access is allowed to your information without your own private key. However, this security can only be guaranteed if you understand and handle the security of the system correctly.

Compare the different options

There are several types of cold wallet available on the market, each with specific functions and features that are worth comparing to find the one that best suits your needs.

Factor in costs and limits

The fees and limits associated with cold wallets may vary depending on the type of wallet you choose, so make sure you are familiar with this information before making your choice.

In conclusion, a cold wallet is a cryptocurrency wallet that is outside any system connected to the Internet. It enables these cryptocurrencies to be stored securely, but without being able to be transferred.

It's a safe storage option for cryptocurrencies, especially for people looking to protect their assets for the long term.