What is a Cold Wallet?
A cold wallet is a concept that many people who make cryptocurrency transactions have heard of. Cold wallets are offline wallets that you can use to protect your valuable cryptocurrencies such as Bitcoin (BTC or Ethereum (ETH).
A cold wallet helps cryptocurrencies to be stored offline to be safe from future risks over the Internet.
How does a cold wallet work?
A cold wallet is the best way to protect your cryptocurrencies from cyber attacks. Because these wallets are not connected to the Internet. That's why they are extremely safe.Cold wallets are physical devices that have random number generators to generate private keys. In general, all methods by which cryptocurrencies can be stored offline are covered by a cold wallet.
Since cold wallets are not constantly connected to the Internet, their use is not very practical. However, with the high security they offer, they are especially preferred by long-term investors.
How to use a cold wallet?
Nowadays, when cybercrime has increased significantly, the use of cold wallets has become quite common. If you want to keep your cryptocurrencies in cold wallets, you should use one of the paper or hardware wallets. In both cases, you will need another device to use your wallet. You can make transactions with your crypto assets through the devices you have connected your cold wallets to.
What are the types of cold wallets?
Cold wallets are usually physical hardware such as USB memory sticks that have no connection with the Internet. Cold wallets, which are characterized as the most reliable type of cryptocurrency wallets, are paper wallets, hardware wallets and physical Bitcoin wallets.
Paper wallet
A paper wallet is a printed document that is open and has your keys written on it. Usually the key is indicated by a QR code. You can get information and support from sites such as BitAdress and Bitcoinpaperwallet to create a paper cryptocurrency wallet. Although it does not carry the risk of being stolen over the Internet, you must protect this document in a good way. Because if you lose the document, have it stolen or damaged, you will not be able to access your account. Due to its defects, the use of paper wallets is now considered dangerous. One of the biggest flaws of a paper wallet is that you can only send all of the crypto money contained in it, not some of it.
Hardware wallet
Hardware wallet refers to devices that serve to store private keys securely. It stores your private keys on offline, encrypted chips that allow access to your crypto assets.
In order to access your hardware wallet, you need to enter your pin code in the field located on the wallet. If you forget your PIN code, you will need to reset your device. For this, you also need to enter the keyword group that you determined during the installation phase. Hardware wallets that ensure that private keys do not leave the device must be used with another device because they are offline. Hardware wallets do not catch viruses from computers and phones, do not leak private keys thanks to their highly secure structure.
Physical Bitcoin wallet
A physical Bitcoin wallet is a type of cold wallet that looks like a coin and can be loaded with money. Although the purpose of using a physical Bitcoin wallet is ease of use for offline purchases, it has also recently become Decently popular among collectors.
