Cryptocurrency is much trending topic currently and many are investing in cryptocurrency. Security is the important feature when it comes to currency. In cryptocurrency, there are two types of storage- Hot storage and Cold storage. Hot storage (wallet) is either an online or software-based wallet, so it involves a high risk of hacking and it is convenient only for storing a very small amount. It states the importance of cold storage in storing Cryptocurrency on bitcoin prime website.
Now a question arises, what is cold storage, and does it work? Cold storage is a way of holding cryptocurrency in the form of offline tokens which aims to provide security from hackers. Cold storage does not depends on internet connectivity. It includes-
Paper wallet Is the offline way of holding Seed phrase or Private keys. Computer cannot store it as it is not store in any technical device.
- The main objective of using an offline paper wallet is it remains secure from hackers.
- As it is the paper format, so it is the cheapest type of cold storage.
- Paper wallet can be destroyed due to fire, coming in contact with children or other threats.
- It requires some skills to generate private keys.
The hardware wallet is the type of cryptocurrency wallet that stores the private keys of the users, it reduces the risk of your bitcoin being stolen. It has the main advantage that unless like paper wallet it is not that vulnerable and the private keys are never exposed to any type of computing devices.
- Despite having a very high level of security, still it is convenient for frequent use of the wallet.
- All the signing transactions, as well as private, are safe and secure.
- It will cost some money, still it the investment in security.
Well, a cold paper wallet provides good security for a large amount. But if you are looking for the safest way for the large amount and wanted a long-term durable solution then the solution to it is Deep cold storage.
Deep cold storage
It is a metal version of ‘paper wallet’. It provides long-term storage of backup.
- A metal wallet is very secure than any other element, it is safe against fire, water, children, and other factors.
- It is cheap to get the required tools and do it yourself but to save time we can buy this product.
- It requires some time and effort to create a metal wallet than writing it on paper.
- It will cost you some, but again it is an investment in higher security.
Things you just remember:
- Keep private keys and backup seed phase a secret, never share it with anyone.
- Ideally, try to convert paper backup into metal backup.
- Make 2 copies of seed backup.
- Don’t take a picture of private keys or seed phase.
We hope that this article has clear all your doubts about cold storage cryptocurrency and hope that you will not compromise with the security.