Bitcoin Cold Storage: What It Is and Its Advantages Over Hot Storage

Bitcoin Cold Storage: What It Is and Its Advantages Over Hot Storage

You might have been wondering what the differences between hot and cold Bitcoin wallets are and which is more secure. Well, look no further.

This article breaks down cold Bitcoin wallet storage and explains why it is a better option compared to hot wallets. It also recommends some cold wallet options for you to use in storing your Bitcoin.

Hot and Cold Wallets
A hot wallet is a cryptocurrency wallet that is linked to the internet. It provides easy access to your digital assets. However, as with anything linked to the internet, it can leave you open to cyberattacks, malware corruption, and other technical vulnerabilities.

A cold wallet, on the other hand, is an offline cryptocurrency wallet. It is less accessible compared to hot wallets which makes it very efficient in staving off threats. That being considered, it poses a more secure front than hot wallets.

Why Use Cold Storage?
It should be noted that cold wallets are not recommended to just any digital asset owner. Active traders are required to have their Bitcoin on exchanges at every time to allow them quick access to their funds for unexpected trading opportunities.

However, if you have a large amount of Bitcoin, then cold storage is a must for you as it is the most secure way to store your digital assets.

All in all, it is advisable for every Bitcoin owner to always have cold storage.

Kinds of Cold Storage

Commercial Hardware Wallet
A hardware wallet is constructed to store and secure cryptocurrencies offline. It requires a set keyword to allow you access funds or to recover your funds in the case of a stolen or broken wallet. It also gives its users immunity from computer viruses. Some popular hardware wallet producers are Trezor, Keepkey, and Ledger.

USB Drive Wallet
As the name indicates, this wallet is a cold storage system located on a USB Drive. For additional security, a bootable USB should be constructed through the use of a privacy-oriented OS like Tails or Ubuntu. What this does is it shields the drive from getting copied elsewhere.

Physical Bitcoin
These are real, literal Bitcoins that can be held in your hand, making them one of the most secure cold storage methods. It takes the form of a coin with a Bitcoin symbol inscribed on it.

However, they can be stolen and in such an event are almost impossible to recover.

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Author : Azeez Mustapha

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Azeez Mustapha is an experienced author, trader, markets analyst, signals strategist, and funds-manager.