A cold wallet is a wallet which is completely offline. It does not exist on a smartphone, tablet or on the internet. They are usually used for the storage of much larger amounts of cryptocurrency, whereas hot wallets, as they are easier to access, are used for more daily amounts of cryptocurrency.
There are two main types of cold wallets:
- Paper wallets - a piece of paper which has your wallet private key on it, or a QR code
- Hardware wallets - a physical device which contains the private keys to your wallet addresses
Pros of cold wallets:
- Super secure and hard to hack
- You literally hold your private keys in your hand
Why avoid a cold wallet?
- You will need the wallet on you to access your funds
- If you damage the wallet you could lose the contents
If you do use a cold wallet, we do recommend using either Trezor or a Ledger.