A cold wallet is a wallet that is completely offline and is used for the long-term storage of cryptocurrencies. It is also called Cold Storage. Currently, not a day seems to go by without a new major report of hacks or loss of access data through the cryptoassets being lost. The secure storage of crypto currencies has never been more important than it is today. Crypto-currencies, unlike most conventional currencies, are exclusively digital currencies. The use of such currencies therefore works completely differently than with conventional currencies, especially in terms of storage and administration. Since crypto-currencies do not exist in any physical form or structure, they cannot technically be stored or kept anywhere.
Instead, all crypto-currencies are always stored on the block chain (or comparable technologies, e.g. the tangle). The users get access to their assets by using the private key that belongs to the public address of their asset. If this private key is lost, access to these assets is also irretrievably lost. Therefore it is extremely important to keep the corresponding keys safe.
For transactions, a sequence of the recipient's public key and the sender's private key is generated and used to validate a transaction in digital currency. There are different forms of crypto wallets that provide different functions and differ in terms of security, convenience, accessibility, etc. One of them is the Cold Wallet, i.e. the Cold Storage. Let's take a look at what exactly a Cold Wallet is and why they are so important.
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