Cryptocurrency has become everyone’s favorite thing to discuss these past several years. Well, not for the last six months because the whole market crashed after a major 2021 bubble, but you get the point.
Anyway, as the popularity of crypto grew, so did the need for better security measures, which raised the question – is cold storage safe for crypto?
We’ve all heard anecdotes of people losing their hard drives or misplacing their cold wallets with thousands or even millions of dollars worth of BTC inside, only to never see it again. So, is cold storage really safe?
The answer is a resounding yes. Unless you’re a scatterbrain or you have incredibly bad luck, cold storage is without a doubt the safest way to store your cryptocurrency.
Let’s take a look at why that is.
What Is A Cold Storage Wallet?
Just on the off chance that you’ve just got into cryptocurrency and you have no idea whatsoever what cold storage is, let’s break it down for you.
Any wallet that’s not connected to the internet is considered cold.
In other words, pretty much any piece of tech that can store cryptocurrency offline can be considered a cold storage wallet. This includes USB drives, paper wallets (don’t use these please), dedicated hardware wallets etc.
Now that we know what this thing e is, let’s take a look at some of the benefits it offers.
The Benefits Of Cold Storage
There are quite a few benefits that come with using this kind of wallet for your coins and tokens, but we’re just going to touch on the main ones.
1. Increased Security
First things first, an offline wallet is a lot more secure than any other wallet solution out there.
Even if someone did manage to get their hands on yours, they wouldn’t be able to do anything with it unless you’ve wrapped it in a piece of paper with your recovery phrase written all over it.
2. Reduced Risk Of Hacking
This one’s kind of the same as the last one, but it’s worth mentioning separately.
Since your cold wallet is not connected to the internet, it can’t be hacked, and when you consider that hacks are responsible for the majority of crypto losses, this is a pretty big deal.
3. Peace Of Mind
Sort of an underrated benefit of these things certainly has to be the peace of mind they offer.
If you’re someone who’s constantly worrying about whether or not their crypto is safe or whether an exchange is going to suffer a terrible fate or if someone’s going to hack your phone or laptop, then this is definitely the right move for you.
4. Easy To Use
The fourth and final benefit – cold storage is actually really easy to use.
Once you’ve set it up, all you need to do is send your crypto to your wallet address and it’s there, stored safely and securely until you need to use it again.
What’s The Catch?
Now, all of this probably sounds too good to be true, and you’re probably thinking that there must be some kind of catch, right?
Well, there is a catch, but it’s not really a big deal.
The only real downside to this approach is that it can be a bit inconvenient at times.
For example, if you need to send some money to someone quickly, you can’t just do it from your cold wallet like you could with a hot wallet or a platform like www.escrypto.com.
Instead, you’ll need to first transfer your coins from your cold to a hot wallet or a platform, and then transfer it from there to the recipient.
This isn’t really that big of a deal, but it is worth bearing in mind.
Other than that, there’s not really much else to say about this method of crypto storage.
It’s safe, it’s secure, and it’s definitely the best way to store your tokens long-term.
How Much Do Cold Storage Solutions Cost?
Another thing to keep in mind is that cold storage solutions do tend to cost more than hot wallets.
Now, granted, that’s not too hard since hot options are universally free, but it’s something to keep in mind nonetheless.
For example, a popular offline crypto storage solution like the Ledger Nano X will set you back around $150.
This might seem like a lot of money, and it certainly is if you’re holding onto several hundred in crypto. But, if we’re talking big bucks and if you consider that it’s basically impossible to hack and that your crypto is going to be safe from pretty much anything except personal negligence or a house break-in, $150 does not seem like a bad deal to me.
Can You Use These To Store Any Crypto Currency?
While it certainly might seem that an offline storage solution would be possible to store just about any type of cryptocurrency, that’s not actually the case.
The vast majority of offline wallets support quite a lot, but not every single one. However, a handful of the most popular options such as Bitcoin, Ethereum, Litecoin, and so on, will definitely be supported.
The one we mentioned earlier can actually hold up to 5,500 different coins and currencies, so there is little to no chance that you will find yourself in a situation where you can’t store your favorite types of crypto.
Can They Store NFTs?
If you’re into collecting digital art or you’re a savvy investor looking for the next BAYC, you’ll be pleased to know that the vast majority of cold storage solutions can also be used to store NFTs.
Now, there are some that don’t support them just yet, but any piece of hardware from a reputable manufacturer will welcome your new NFT with open arms.
Conclusion – Is It Safe?
We’ve already said it but let’s just double down on it – cold storage is super safe for storing your digital wealth.
It’s secure, it’s easy to use, and it’s definitely the best way to store your cryptocurrency long-term.
Sure, it might be a bit inconvenient at times, but the peace of mind it offers is definitely worth it.