What Is Cold Storage In Crypto?
In today’s time, there are a lot of people investing in cryptocurrency which in the result is increasing the traffic and the no. of ventures or platforms providing the service to the crypto holders. There are a lot of platforms that provide the service for buying, selling, and lending crypto assets. But the people are concerned about the problem of the storage of cryptocurrencies. Very few platforms provide this service and very few people know about that. The storage of cryptocurrency is necessary because for physical currency or traditional currency we have banks but the banks do not provide services for the storage of crypto assets. So in this article, we will discuss the storage of cryptocurrency dealing with topics on how we can store crypto assets and specifically about the cold storage of cryptocurrency. In addition, people also need ways to buy bitcoin safely and store bitcoin in the easiest way.
Storing the cryptocurrency
There are two ways of storing the cryptocurrency by the user. One type is the hot type and the other one is cold storage. The hot storage type is the type of storage that is not present in the physical world. Examples of the hot type of storage are mobile phones, websites, and mobile or desktop applications. In this article, we will specifically discuss cold storage. Cold storages of cryptocurrency are the type of wallet or storage that can be touched and have physical existence. For the storage of the cryptocurrency, the owner must have the key to the blockchain, without the presence of the key no one can access the crypto assets. If the key is lost then the crypto assets associated with that key are also lost and can never be gotten back by the person. Now you must be thinking about how we can store the crypto assets because they don’t have a physical existence, so, the answer is that the key to a blockchain is the thing that is stored. In third-party apps or websites, the key of the owner is kept safe by that organization which is very risky because the organization’s app or website can be hacked by the hackers and all the keys stored can be stolen so it is not advisable to keep your keys in such storages for more than 2-3 days. The solution to this problem is that you keep your key with yourself and that is where the cold storage comes into the picture. Cold storage means keeping the keys in offline modes like hard disk or paper. The different types of cold storage for the storage of crypto assets are discussed below
It is one of the most demanded cold storage wallets because it is an electronic device that keeps your key safe and you can keep the device safe in your home or another place. Another advantage of hardware wallets is that they let you recover your keys again if the device is damaged and in this way, you can never lose your keys and hence crypto assets.
The second most used wallet for the storage purpose of cryptocurrency is the Paper wallet because it is cheap and free to use. In this type of wallet, the key is printed on a piece of paper and hence there is no chance of loss of assets due to hacking. The only disadvantage is that if the paper is lost then you can’t get your asset back.
The key is kept in the desktop system and you can access your key from your system. But when using the key for the transfer of funds you have to be online. Thus a proper internet connection is required to complete the process. This form of wallet is also irreversible just like the paper wallet.