Cold Storage

Cold storage means keeping private keys on a device with no internet. Remote hacks then have nothing to reach. Hardware wallets such as Ledger and Trezor, paper wallets with printed QR codes, and air-gapped computers are the usual methods. Moving funds means plugging in the device or typing keys, which is slower than a hot wallet.

Holders keep most value in cold storage and a working balance hot, like a vault versus a checking account. Exchanges and custodians keep most customer funds the same way. This eliminates the primary attack vector for theft, remote hacking. The tradeoff is convenience.

Moving funds from cold storage requires physically connecting the device or manually entering keys, which adds friction compared to hot wallets. Most security-conscious holders keep the bulk of their assets in cold storage and only a small working balance in a hot wallet, similar to keeping savings in a vault and spending money in a checking account. org recommends keeping large balances offline.

Paper, hardware, and air-gapped machines are all cold storage.