When it comes to owning cryptocurrency, there is one way to keep your assets safe that stands tall amongst the rest: cold storage hardware wallets. Ask anyone who’s been in the crypto space for a long time and they will surely tell you they are benefiting from the security of cold storage. What makes it so great? We take a look below.
WHAT IS COLD STORAGE?
Online digital wallets, or “hot wallets”, whether provided by a crypto exchange or a third party, all require internet access. They are considered the most vulnerable wallets in the world as they store your security keys and codes in an online environment.
That's where cold storage comes in. Cold storage simply means taking your cryptocurrency and transferring it into an offline storage device. This is most commonly referred to as a hardware wallet, a USB-sized device.
OWNERSHIP OF YOUR PRIVATE KEY
When you store your assets on an exchange, you are giving up ownership of your private keys. Exchanges in fact store the private keys on behalf of their users and instead, you are given access to your cryptocurrency via a username and password to log into their website. What happens if their website disappears? Well, so does your cryptocurrency.
Cold Storage hardware wallets, however, allow you to keep ownership of your private key. Your private keys are generated and stored on the hardware wallet which is then protected by a PIN and an optional passphrase. The keys are never exposed to the internet so they can’t be stolen or copied. That’s why it’s known as cold storage.
Remember, not your keys, not your coins!
AVOIDING MAN-IN-THE-MIDDLE ATTACK
Another pivotal feature of cold storage hardware devices is that when you send money from your wallet, you are prompted to confirm the transaction by pressing a physical button on the actual device. This is an important step to stop a common attack known as ‘man-in-the-middle attack’. Should your computer become infected with a virus that would allow remote access to your wallets, an attacker would not be able to successfully remove any assets from your wallet without being able to physically press the confirmation button on the device. A simple but effective countermeasure to stop you from being targeted remotely!
BEST COLD STORAGE SOLUTIONS
There are a few companies leading the way when it comes to cold storage solutions: Ledger & Trezor. Having sold well over 3 million devices between them to date, these two hardware wallet manufacturers are setting the standard when it comes to usability and security of your cryptocurrencies.
As the popularity of hardware wallets have grown, so have the competitors entering the market. Here at Coinstop, we get requests almost daily from new and prospective manufacturers all over the world. Whilst we would love to stock them all, we have to be sure that we are providing our customers with only the safest wallets out there. We are always researching and reviewing samples that are sent to us in order to uncover the ‘next best thing’.
Since the beginning of 2020 we have listed a number of new wallets that we've tested internally and have deemed fit for use. Our latest edition is the Coolwallet Pro, a credit card sized device that fits your #crypto snug within your wallet. If you purchase the Coolwallet Pro from Coinstop before the 15th November 2021, you can go in the draw to win BNB! For more conditions of entry, please check out the T&C’s here.