Security
Cold Wallet
A cryptocurrency wallet that is not connected to the internet, providing maximum security for long-term storage. Also called cold storage or offline wallet.
Last updated: January 5, 2025
What is a Cold Wallet?
A cold wallet (or cold storage) is a cryptocurrency wallet that operates offline, disconnected from the internet. This isolation protects your crypto from online threats like hackers, malware, and phishing attacks.
Types of Cold Wallets
Hardware Wallets
Physical devices that store private keys offline:
- Ledger Nano X/S - Popular USB devices
- Trezor - Original hardware wallet
- Coldcard - Bitcoin-focused
Paper Wallets
Physical printouts of:
- Public address
- Private key (often as QR code)
- Created offline for security
Air-Gapped Computers
Dedicated computers that:
- Never connect to internet
- Used only for signing transactions
- Maximum security setup
Cold vs Hot Wallets
| Feature | Cold Wallet | Hot Wallet |
|---|---|---|
| Internet | Disconnected | Connected |
| Security | Highest | Lower |
| Convenience | Less | More |
| Best for | Long-term storage | Active trading |
Why Use Cold Storage?
Security Benefits
- Immune to online hacks - No internet exposure
- Protection from malware - Can’t be infected
- Safe from exchange failures - You control keys
When to Use Cold Storage
- Large cryptocurrency holdings
- Long-term investments (HODLing)
- Savings you don’t need quick access to
- Any amount you can’t afford to lose
Best Practices
- Buy hardware wallets directly from manufacturers
- Never share your seed phrase
- Store backups in multiple secure locations
- Test small amounts before large transfers
- Keep firmware updated on hardware wallets
Exchange Cold Storage
Major exchanges like Binance and Kraken keep the majority of customer funds in cold storage, typically 95%+ of assets.
Ready to Start Trading?
Now that you understand cold wallet, explore the best exchanges to begin your crypto journey.