Ever since it was first introduced in the real world market, Bitcoin has seen immense growth as a commodity. What started at a value of a few cents was valued at over $60,000 in the last few months. There are many investors out there who invested in Bitcoin early and are now enjoying tremendous amounts of returns as Bitcoin billionaires.
Inspired by their success, many investors around the world have started investing in cryptocurrencies and if you too wish to do so, then you can click here to get started with your investing journey. One prime aspect to note is that when most of these investors get started on their investing journey, they are often stumped with a single question – where do we securely store our Bitcoins?
There are countless websites out there that work to scam honest investors out of their hard-earned money. However, you can easily know which websites are scams and which websites are not simply by reading more information here. While there are many investors who have found cold storage to be an optimal option for storing Bitcoins, many new investors are still unaware if it is possible to store bitcoin offline in them.
If you are one of these investors then don’t worry, because we have you covered. In this article, we will explain what exactly is cold storage, how you can use it to store bitcoin offline and what benefits it has compared to other storage options.
What is cold storage?
To understand what cold storage is, you need to understand how bitcoin wallets work and what the different types of wallets are. Bitcoin wallets, or any crypto wallets for that matter, can be classified into two major types – hot wallets and cold wallets/cold storage. Wallets that are always connected to the internet and cannot function without an active internet access are called hot wallets.
On the other hand, wallets that do not require the internet to function and can operate as an offline means for storing all your cryptocurrency are called cold wallets. Most crypto wallets that you see on crypto exchange platforms are online hot wallets. While these wallets are a quick and easy way to access your bitcoins, they are also the most non-secure way to do so as they can be easily hacked.
Cold wallets, on the other hand, are not connected to the internet at all and thus there is no chance that a hacker can hack them. They also come in a number of different forms for you to choose from and can be only accessed with offline private keys that you can securely store anywhere you want separate from the wallets.
As a general rule of the thumb – only use online wallets with amounts of money that you can afford to lose. If it’s anything above the amount that you can’t lose no matter what, we strongly recommend using cold storage for them.
Is it really possible to store bitcoin offline in cold storage and if so, how?
There are a number of ways through which you can use cold storage to store bitcoin offline. Cold wallets come in several unique forms such as paper wallets and hardware wallets and each have their separate way of using them.
To use a paper wallet, all you need to do is go to an authentic website that issues paper wallets for you. Once you are there, make an offline copy of the page and turn off your internet to ensure that hackers don’t get any of your information. Fill in all your details and the page should generate your own unique address key of your wallet along with a private key that you need to keep safe with you at all times.
Simply print the paper wallet while ensuring that your printer is offline as well. Once that’s done, protect this paper wallet from the weather by laminating it from a reliable store. If you need to add funds to the wallet, you can simply scan the QR code and do so. Once you feel like you want to remove your funds from the wallet, put in the wallet address at any exchange platform or website and then enter your private key and you will be able to access all your bitcoins easily.
For hardware wallets, the process is much simpler. All you need to do is install all the wallets that you currently use on the hardware wallet. Whenever you wish to access your cryptocurrency, simply plug the hardware wallet back in into your laptop or PC and use your cryptocurrency as you wish.
Benefits of using cold storage
There are several benefits of using cold storage instead of hot wallets. The most primary one, as we already discussed, is security. Cold storage offers much more security than hot wallets ever will primarily because they are completely offline. Unless and until an individual knows all your private keys, has physical access to your paper or hardware wallets and knows how to bypass the additional security measures hardware wallets have, you can rest assured that no one will be accessing your cryptocurrency anytime soon.
There is also the additional benefit of having portable wallets wherever you go using hardware wallets. Since it is not really secure to use your mobile device or laptop to connect to your crypto wallet outside, it is a much better move if you use your hardware wallets to carry your crypto around wherever you want.
Cold wallets give you the peace of mind that your cryptocurrencies won’t be touched by hackers or malicious individuals anytime soon which hot wallets fail to do. However, if you are new to cryptocurrencies and are not going to hold large amounts of crypto in your wallets, it is probably a much better idea to use online wallets in a secure way than using cold wallets to be secure. Cold storage is a preferable option only for those that have large amounts of crypto in their wallets.
There are several ways through which you can use cold storage to store bitcoin in an offline way. We hope this article was insightful for you and if it was, please consider following our website for regular updates as it will help us out immensely.