What is Cold Wallet?

Cold Wallet

Cold Wallet is a method of storing Bitcoin and other virtual currencies, also known as “cold storage. It is the storage method with the highest level of security.

There are two types of cold wallets: paper wallets, where the private key is written down on a piece of paper, and hardware wallets, where the private key is managed with metal, coins, or a special secure device.

Cold wallets, which are offline, have virtually zero risk of being hacked and are perfect in terms of security.

However, there is a possible risk of losing the cryptocurrency if the cold wallet itself is physically damaged, stolen or lost.

On the contrary of a cold wallet, a wallet that is connected to the Internet is called a “hot wallet. A cold wallet is more secure than a hot wallet, but the cold wallet itself needs to be well managed.

Also, because it is difficult to use for payments, cold wallets are used only for storage purposes, and are often used in conjunction with another wallet for daily wallets.

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