What is the best way to store your cryptocurrency? If you’ve been doing research, on this question, you have probably come across some information about cold storage crypto.
The term “cold storage” refers to any type of offline wallet that isn’t connected to the internet or a computer network. Crypto cold wallets are highly secure and have low chances of getting hacked by malevolent individuals who are committed to stealing your data and hard-earned assets!
If you think about it, cold storage crypto is one of the best methods for protecting your tokens because every time someone tries to access a wallet over an unsecured connection (a Wi-Fi hotspot), there’s always a chance they will get caught doing something illegal like installing malware onto someone else’s device.
One of the biggest benefits of cold storage crypto is that you can have your cryptos with you when on the go. Users don’t have to take their devices out of their pockets since they are usually small and compact – which enhances descreteness and comfort while carrying them around or transffering cryptos.
What Is Cold Storage?
Cold storage is a way to store your cryptocurrencies offline for security purposes. It provides a more secure alternative to traditional wallets. What makes it outstanding is that it is not typically subject to hacking because it doesn’t exist on an online network and can’t be hacked remotely.
Cold storage also protects against accidental loss by ensuring you don’t accidentally spend a cold wallet address— unlike with hot wallets where you could lose all your money in one go just by forgetting one transaction password or making a typo when entering the recipient address manually.
With cold wallets, you only need to remember this single password since everything else is stored securely on the device and no o one can spend your cold storage assets without it.
It’s worth noting that the best crypto cold storage wallets come at a price; hence you need to have a budget. However, this doesn’t mean you will have to spend thousands of bucks to get the device that will suit your needs.
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Best Cold Storage Options for Cryptocurrencies
There are various types of cold storage options. We already covered some of them in this article about the best cryptocurrency wallets. They divide themselves in these categories:
Hardware Wallets
One of the best ways to store Bitcoins safely is by using a hardware wallet such as Ledger Nano S or Trezor Model T. These devices offer an easy-to-use interface while also providing one of the most secure methods in which people can store their tokens without worry.
Hardware wallets are connected to your computer and are designed in a way that allows users to send cryptos easily and conveniently.
As long as you have a strong password that no one else knows, all assets stored in your hardware wallet are safe since they aren’t exposed in an online environment. If someone tries to hack into your wallet remotely when connected to a computer with internet connectivity, access will be denied since most hardware wallets generate unique private keys for every single transaction, which cannot be revoked or accessed by anyone else.
Hardware wallets are also immune from viruses and malware that infect your computer, which makes them a safe option for storing Bitcoins.
They cannot have their private keys back doored by hackers because they do not store the entire blockchain like most cryptocurrency interfaces do. This ensures that passwords stored in them devices will never get stolen or hacked.
If you want to find a complete list of wallets to store Ethereum click here.
Paper Wallets
Paper Wallets are some of the best crypto cold wallets that allow you to store your Bitcoin private keys offline. The term “paper wallet” comes from the idea that all one needs is their paper key and QR code printed out on paper-like material such as cardstock or an actual piece of printer paper.
Paper wallets are among the best crypto cold wallets available in terms of security because they aren’t connected to the internet. They are cannot be hacked into remotely, and your BTC is always safe from malicious individuals.
Paper wallets can be stored in secret spots like your safe, safety deposit box, or any other location where they can’t be found by others. Only take your paper wallets when you need them, and safely keep them until you need them again.
Desktop Wallets
Desktop wallets are software programs installed on desktop computers and laptops to store Bitcoin private keys offline for added security. Desktop wallets generally work by encrypting all data from every single wallet with its own set of encryption methods so only you have access to your cryptos.
These are the best cold crypto wallets for people who want an actual hands-on experience trading cryptocurrency via their computers without having to use online platforms that would potentially get compromised.
Even though desktop wallets are a safe cold crypto wallet, there are some tips that can make it more secure, including:
- Secure the wallet with a strong alphanumeric password. Remember to lock up the wallet with a strong passphrase, not just any old password!
- Take advantage of two-factor authentication.
- Encrypt the computer so that even if someone steals it, he will not access your data.
- Store your Bitcoin private keys offline for added security against hackers.
- Remember to back up all data on a regular basis and store it in an airtight container like an encrypted USB drive or CD-ROM that can be stored safely at home or at work where you have access to them in case something happens such as theft or natural disasters such as fires, floods, strong winds, and more.
- Use your wallets on an offline computer, preferably one that is not connected to a network such as public Wi-Fi or other devices.
- Turn off any unneeded software programs while running Bitcoin transactions, including those which run in the background, such as communication apps and third-party antivirus programs. This will prevent any possible bugs or viruses from interfering with the Bitcoin wallet.
USB Drive Wallets
USB Drive wallets are one of the best crypto cold storage for your cryptocurrency offline. They can be easily hidden and provide users with peace of mind knowing that no hacker or snooper has access to their assets without permission.
If you are concerned about hackers, you might want to check out also the most anonymous cryptocurrencies out there.
For example, using a USB drive wallet to store Bitcoin means you can purchase items in public places such as restaurants or stores while remaining assured that nobody has access to your private key and any other data stored on the device.
These devices come in different forms including an entire hard drive that plugs into new computers, SD cards, and even thumb drives!
If someone were to steal this hardware from you they would not have any way of gaining access unless they also had some sort of password or key that is only known by you.
There are many advantages of using USB drive wallets including:
- No risk of getting hacked. If someone were to hack into your USB drive they would not be able to extract any of the data stored on it without your personal key that is only known by you and nobody else.
- Transferring funds with ease. When using a hardware wallet, all you have to do is plug in the device via a USB port and follow instructions for transferring coins from one address or account to another—no need for third-party apps!
- You have the option to use paper or digital copies of your wallet information for cold storage purposes.
Finally…How Do You Choose The Best Cold Storage?
There are many factors you should consider when choosing the best cold storage crypto wallet. They include:
- Convenience: How easy is it to use the cold storage wallet? If a cold wallet is too complicated to use, or demands the installation of a third-party software for it to function, then it is not the best option for you.
- Security: How safe are your assets from being stolen or hacked? In case the cold storage crypto you are considering have a history of security breaches, do not opt for it. Go for the one that uses the best security practices.
- Costs: how much does it cost to use this wallet? Do not break your bank just to get a good cold storage crypto. Go for the best service that you can afford.
- Ease of backup: Can you easily back up all your data with just a few clicks without having to rely on third-party services such as Google Drive, Dropbox, iCloud, and more? If a crypto cold wallet cannot allow you to easily backup your data, do not use it.
- How long do confirmations take: Transactions need to be confirmed by the network before they become available for spending meaning that some wallets offer instant confirmation while others require more time. If a cold storage crypto takes hours to confirm a transaction, it is not the best option for you.
Key Takeaways
- Cold storage wallets allow you to store your cryptocurrency offline;
- Even if you have limited connection, you can still access your assets with these wallets;
- There are hardware, paper, desktop and USB drive wallets;
- Some wallet apps can also be considered cold storage if they allow you to navigate and access your data offline;
- Cold storage wallets offer more safety and that’s their biggest advantage. Since they are units travelling in your pocket, they are more protected against hackers and other online threats.
Conclusion
Even though all the cold storage crypto solutions we have outlined above are great, you need to remember they are not created equal.
You, therefore, need to consider these factors, do your due diligence, and choose the best that you can afford.
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