Cold Storage

In order to access your cryptocurrencies in the relevant blockchain network, you need to use crypto wallets. Cold storage is an asset storage method that you can perform with your hardware wallets. This method requires you to purchase a hardware device with advanced encryption features and transfer your crypto assets there. In this type of storage option, the way to access your assets is to physically insert them into your computer. In other words, you keep the private key that will allow you to access them connected to a device like a credit card or flash disk. It is very important at this point that your device is not lost or damaged.

Learn more about the most popular hardware wallets of 2022.

What is Cold Storage?

Cold Storage allows people to store their crypto assets offline, with no internet connection. Cryptocurrency investors use cold storage options to prevent possible online hacks.

Ways to Store Crypto Assets: Hot and Cold Wallets

Cryptocurrency holders can store their assets in two different types of wallets: cold wallets or hot wallets. Hot wallets can generally be used as a desktop application, browser add-on, or mobile application. Especially people who buy and sell their assets on a daily basis and use them actively may prefer to use hot wallets.

Cold wallets, on the other hand, are preferred by those who want to keep some of their assets somewhere as savings. Major exchanges also offer confidence to their users by keeping a significant amount of platform assets, for example, about eighty percent of the total treasure, in cold wallets.

Learn more about crypto wallets.

Benefits of Using Cold Storage

Although the online wallets connected to the Internet take great precautions against network attacks, at some point they become insufficient and vulnerable to such attacks. This can result in various theft cases. To avoid such a situation, some investors keep their crypto money on various USBs, CDs or computers that are not connected to the network. This use of Cold Storage also protects them from potential theft.