What is a Bitcoin Cold Wallet?
5 min read
For more than a decade now, bitcoin remains the most prominent among other cryptocurrencies. Despite its tremendous growth, the cryptocurrency faces a tough market environment filled with scammers, fraud, and hacking.
The insecurity in holding bitcoin has its risks and the investor must choose a haven for their coins. We have several ways of storing bitcoins, one of them being cold wallets. So, what is a cold wallet and what does it entail?
What is a Cold Wallet?
One of the safest ways to keep bitcoins is via a system known as Cold Wallet. Just as the word wallet suggests, it's a kind of storage somewhat similar to a physical wallet. The only difference is that this one is a digital form of storage tool.
It usually involves storing bitcoins offline entirely separate from internet reach. Keeping bitcoins offline is one sure to sure way to prevent them from hackers. This means you don’t have to be bothered about a hacker acquiring digital access to your wallet.
The Difference Between a Cold Wallet and a Hot Wallet
There are several differences between cold and hot wallets
. One of them is the amount of security they provide for your crypto assets. Some of the differences between cold and hot wallet include:
How to Establish a Bitcoin Cold Storage
- Hot wallets are wired to the internet whereas cold wallets are offline. Due to this contrast, cold wallets are considered a safer way of storage for digital assets.
- Hot wallets are more vulnerable to scammers while cold wallets are more secure since they are separated from internet access.
- A cold wallet is more expensive to buy while a hot wallet is essentially free.
- Hot wallets have quicker access to your cryptocurrency since it's also accessible via cell phones white cold wallets are not ideal for quicker or regular transactions because they are more private, similar to a bank vault.
This guide will show how to make a cold wallet using the paper method.
How to Start
The initial step to obtaining your bitcoin
into cold storage is by designing an offline bitcoin address. This address should have two keys. The private and the public key.
Establishing a Paper Wallet
Establishing a cold storage paper wallet is pretty much simple. It involves several practical procedures listed below:
Print the Page
- Search the Bitcoin.com paper wallet tool and save it to your device
- Save a web page to your device and save the file as a done webpage
- After you save, close out the open Bitcoin.com paper wallet tool page then wire out your computer from the internet
- After you deny internet access, open the saved file on your device type any characters into the textbox to build additional uncertainty
- By doing that you come up with an uncertain Bitcoin address that has private and public key pair
The following step will involve making an offline copy of the Bitcoin address that can be reached later with bitcoin for a final cold storage solution. On the saved file, the paper wallet page clicks on the print down and makes sure while doing this you are not wired to wire access.
Once done with creating an offline Bitcoin address
as well as you have made a hard copy of it for safekeeping.
On the printed page place a public bitcoin address and a QR code with the counterpart private key.
How the Paper Wallet Tool Works
Adding Funds to the Cold Storage Wallet
Just like any other bitcoin transaction, examine the public cold storage wallet QR code and make a remittance to your cold storage. Once this is done go through your finance position at the time of your choice using a Bitcoin block explorer.
Are Cold Wallets Safe?
The answer to this question is always a yes. This is because cold storage like said before is the safest way to keep your bitcoins due to its clarified safety provisions. Reason being these wallets are not wired to the internet thus it's properly shielded from scammers and cyber ambushing.
Based on digital crypto storage, there is only a solitary possibility worth keeping in mind and that is using cold wallets as your storage. With cold wallet storage, you are guaranteed 100% safety, and bearing that in mind you feel secure and you don’t have to worry about any kind of theft. Therefore, if looking for a haven then a cold storage wallet for your bitcoins is the one for you. Choose wisely and choose not to be scammed by fraudsters.