Today I did a research and I came across this amazing topic; "Cold storage", and I want to share it with you all. I hope it will be helpful to you all.

10% of this post goes to @blurttradinghub

What Is Cold Storage?

Source
Cold Storage is another means of storing your coins in order to avoid unauthorized access, cyber hacks and vulnerabilities that can be faced by a system that is connected to the internet. It is an offline wallet that you can use to store your coins. You know many digital crypto currency wallets can be accessed by hackers despite the security measures designed to avoid theft. It is a traditional means that will help you keep your crypto currency tokens offline. It will help you as an investor to denial hackers the access to your tokens. For instance; In Banks, if your account has been compromised, the bank is able to refund you your money, unlike your digital crypto currency savings. This is because it is a decentralized system and does not have the back-up of the Central Bank, or federal government.
Your private keys are used for your monetary transactions and if stolen, all your tokens will be lost. Private keys that are stored on a wallet that is connected to the internet can be stolen or generated by hackers using hot wallet ( this wallet stores private keys from digital transaction).

How Does Cold Storage Work?

• There is the paper wallets: They are not that secured, because the ink can fade away or you can easily misplace it or a liquid or water can pour on it. Paper wallet has to do with printing all your private and public keys on paper and add an OR code that will be used to scan when you want to make transactions. OR code makes the transaction faster. It contains all the information you need for spending your coins. If you prefer this method, you can use a safe box or other secure methods to preserve the paper wallet.

• There is the Hardware Wallet: Hard ware wallet is another offline wallet that can be used to protect your private and public keys. They are USB drives that can be plugged into your computer for you to copy the keys. Hard ware wallets are more secured e.g Bluetooth, softwares, and any advanced device. All these devices are air-gapped devices that cannot be connected to the internet. You can get commercial hard ware wallets, they are water proof and virus proof and some of them can support multi signature transactions.

What Is Multi Signature Transactions?

It is a signature mainly for crypto currency transactions, it require more than one or two users to approve a transaction by proving the private keys.

Thanks for reading.