"Cold" bitcoin storage

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Avatar for Hanane34
2 years ago

What is Bitcoin Cold Storage? This is the most common question due to the increasing popularity of this currency and the need for people to keep their digital currencies safe.

Storage (or wallet) protects the secret code you need to use your digital currencies, and helps manage your transactions online, which is similar to an online bank account. The code, which is used as a password, is called a "private key" and is a must in order to keep your funds safe. Anyone who gets your private key can steal the bitcoin in it. And if you lose your private key, you will lose the bitcoin in your account forever, too. It is therefore important to protect personal keys from accidental loss and make backup copies of them.

Bitcoin cold storage means keeping some of your coins offline. This is often a necessary security precaution, especially when you are dealing with large amounts of Bitcoin, and this is considered the most secure way to protect your digital wealth.

You need to use an offline wallet, called "cool" for storage, if:

You needed to store a large amount of Bitcoin, and its security was your top priority;

You do not need to use the currencies in your account often or do not need to access them anytime and anywhere;

You would prefer to protect your finances yourself rather than trust a third party;

You are willing to pay for the cold wallet (usually 50 - 200 USD);

Privacy is very important to you.

There are also other ways to store Bitcoin without an Internet connection: on a USB drive or any other data storage medium in a safe place, or on a paper wallet, or even you can get a currency in physical form, or use an offline computer as a money wallet.

Knowing how to set up cold storage for Bitcoin depends on the method you choose, if you want to use paper, see our guide on creating a paper wallet, if you have purchased a cold wallet, such as Ledger Nano, or Trezor, follow the instructions that came with it.

Conversely, online or "hot" wallets are less secure due to the risk of penetration. Website wallets are particularly vulnerable to third-party private key disclosure, but are more suitable for everyday use.

Therefore, it is recommended to use both types of wallets; Hot wallets to hold small amounts of Bitcoin for everyday transactions, and cold or offline wallets to store larger amounts. However, you can get as many wallets as you want

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Avatar for Hanane34
2 years ago