Like a classic dual of “Rock ‘em Sock ‘em Robots”, some companies around the world are battling for their cold wallet cryptocurrency storage devices to come out on top.
What is cold storage for cryptocurrency? It simply means that you are storing your cryptocurrency in a place that cannot be accessed on the internet. The two ways of doing this is with a physical / digital hardware wallet, which when unplugged has no wifi, power etc and cannot be accessed. The s
econd way is to use a paper wallet, which is a piece of paper with an encrypted QR code on it storing a bitcoin address. These are both extremely secure ways and the best ways to store your crypto.
It is widely known that the worst way to store your cryptocurrency is online within an exchange. Everybody can agre
e that anything on the internet, can be considered open for public consumption. Although exchanges have many layers of security, funds kept online are simply more accessible than storing them in “cold storage”, off of the internet and in your home or property.
How do we know this is a great way to store crypto? Who else does this? The answer is everybody. Well at least any serious investors. One investment strategy is that you put your longterm holds into cold storage. If you think about it, you can consider that keeping your investments in cold storage makes it much more likely that you will leave it there. Your crypto portfolio may be then kept just like a hidden gem, or a buried time capsule ready to access when its growth matures when you may need it most.
Consider the example of Tyler & Cameron Winklevoss. Famous investors in Facebook at its startup phase. The winklevoss brothers took a fantastic payout of $65 Million dollars from the Facebook dispute. In April 2013, they invested $11 Million into Bitcoin. Their Bitcoin has appreciated now to be worth approximately $1 Billion dollars. Where did they store this fortune? The rumour is that they
stored it with a cold paper wallet, split the paper QR code into 4 pieces and stored them in safety deposit boxes at banks across the 4 corners of the united states. Now that is one fantastic way to HODL (Hold on for Dear Life). Tyler and Cameron likely have no intentions of accessing the bitcoin anytime soon. They have other business ventures and other cryptocurrency to use anyways.
So if you plan on storing your cryptocurrency offline in cold storage, there are a few choices. Trezor and Ledgers are very popular and keepkey as well as cool wallets each have their own fantastic features. The best way to make your decision of which to use, should be by research online, reviews and making your own choice.
There are very important tips you should consider on how to be secure when using cold storage. consider these concepts before you hoard away your fortunes. If your cold storage is not secure, then you have to take the steps to make it secure.
Firstly, the only place that you should buy these devices is from the manufacturers themselves. Do not buy these used, from amazon, eBay, even a friend or an acquaintance. If someone else has owned these devices before
you, then you have no sure way to know if it has been tampered with. Some cases have surfaced where used cold wallets have been purchased, and then their funds are withdrawn because the previous owner sets up access to the associated wallet addresses. Although it is offline, if someone else has used it and created backup password phrases, then can check the balance and restore the funds online.
The second thing to consider is where you will store the cold wallet. Under your mattress, in a junk drawer or buried in the back yard are NOT acceptable places to store your cryptocurrency cold wallets. A secure location in your home or property is a good idea. A fire & waterproof safe is an even better idea. But something to consider is that even in the event of a large fire or flood, personal safes may not protect a cold wallet. With enough heat or water, a paper wallet or a trezor, ledger or other item may deteriorate or be compromised, causing your funds to be lost forever. Substantial amounts of money may be best kept in a banks safe deposit box. Yes, there may still be uses for banks in the future, even after crypto takes over!
The third thing to consider is the required backup password phrases. You need to keep these words private and do not share this with anybody. There is no need to share this with your kids, grandma or brag to your neighbour. Never share your secret key or QR code with anyone. This is used to secure or access your cold wallet when restoring the funds to a usable wallet. Again, these words or keys being stored on paper, could be damaged, burnt, soiled and the funds lost. Choose the storage location wisely.
A fantastic new storage option for a backup password phrase is called “Cryptosteel”. It’s made of steel, so it’s fireproof, and waterproof. You can add your private backup phrases to it and store it securely with confidence.
If you goal is to have your security up and complete it today, at a cost of zero, then there is a quick and free solution, as mentioned; paper wallets. Visit these websites, generate a random encrypted address and make your deposit:
So there may or may not be a company that comes out on top selling these fantastic devices for offline cold storage. It does feel very good to HODL crypto offline. If gives you a sense of ease, where it doesn’t matter so much what product you use. The fact that you take these security steps is one of many great decisions securing your portfolio.
For more information, check back to our posts, and share this information with everybody you know. It will put everyone in the right direction towards being secure and save any chance of potential losses.