A wallet is a storage wallet that allows you to secure your cryptocurrencies. Among the different types of wallets out there, there is the cold wallet or cold storage wallet in French.
The peculiarity of these wallets is that digital assets are stored offline, that is, no one can access them remotely. It is the storage wallet that makes it possible to better secure their cryptocurrencies.
What are the benefits of a cold storage wallet?
The main advantage of cold storage wallet is maximum security. In fact, since cold wallets cannot be accessed without having the offline device that contains them, this simply prevents hacking attempts from working.
Security is the most important component of cryptocurrencies since there is no organization that can protect its digital assets as a bank does with its fiat money (euro, dollar, etc.) for example. Thus, it is up to the users to secure their assets themselves.
Even if you have to pay for certain cold storage wallets, the amounts that have to be paid are really insignificant compared to the protection that a cold wallet provides. It is a mandatory investment for any crypto investor who wants to approach the market in a professional manner.
What are the disadvantages of a cold wallet?
However, it is important to point out some drawbacks of the cold wallet. The most important thing is to always have a cold storage device for an operation. Indeed, without this device at its disposal, the slightest transaction cannot be carried out.
It’s quite annoying if you want to do day trading, but not really a disadvantage if you just accumulate your digital assets or do some trades now and then.
When one loses a cold storage device, especially for older models, it means that all the digital assets that were on it are lost forever. However, there is a possibility to recover certain devices using an initial phrase of 24 words that must be entered in the correct order to recover your cryptocurrencies. But in this case, anyone who succeeds in obtaining these 24 secret passwords can gain access to these cryptocurrencies. So it is necessary to put this recovery phrase in a safe place.
What are the different types of cold storage wallets?
There are several different types of cold storage wallets. Here are the three most common:
cool wallets type Ledger Nano X. These are devices specifically designed to store digital assets on them. Transactions can be performed using buttons created specifically for this purpose;
Cold storage wallets on an external hard disk. The principle is almost the same, except that the cryptocurrency is stored on a hard disk (or a USB key) and it is necessary to connect this hard disk to the Internet for transactions;
Paper wallets. It is also possible to print a piece of paper where the wallet address (often accompanied by a QR code) is indicated where all the information for access to its digital assets is indicated.
In our opinion, the easiest option is to get the Ledger Nano X, which was created by a French company. This device is safe, more than right, and easy to carry with you everywhere, which is practical if you want to maintain the ability to carry out transactions quickly.
Conclusion about cold wallets
As we just showed you, cold wallets are the best option out there to properly secure your digital assets. In fact, since these storage wallets are offline, it is impossible for a hacker to be able to hack them to steal existing cryptocurrencies.
Admittedly, it is necessary to have to spend a certain amount of money to get a cold wallet, but its price compared to all the risks one takes with a hot storage wallet is excellent value for money.
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I discovered the world of cryptocurrency in January 2018. I arrived at the worst time to invest, I have not stopped training since then, and now I am sharing my knowledge in order to facilitate the adoption of cryptocurrencies.