I need everything about Cold wallet

[KiaKia]

I've hear people talk about Cold wallets few times before so this question come straight from the mind, are Cold wallet safer than Hardware wallets? Also Binance CEO said Cold wallets are not really safe like people think.  So what am I not getting right?

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[Charles-Tim]

There were massive withdrawal of coins by Binance customers after Binance proof-of-reserve red flag report: Binance's proof of reserves raises red flags: Report

Three days after or so, Binance CEO made the statement:
‘99% of People' Will Lose Crypto Storing in Self-Custody: Binance CEO Changpeng Zhao

CZ was talking about self-custody, not cold storage.

I think that is CZ opinion, but he is very wrong as he only wants people to just hold on exchanges and that is very wrong because of many reasons from lack of full control of your own coins to what could happen like exchange hack and exchange bankruptcy that could lead to exchange users to lose their coins.

The simple truth is that cold storage are the safest type of wallets.

You can see an example here: Creating a Cold Storage wallet in Electrum

If you can not go for cold storage option, you can get yourself an open source hardware wallet.

[OmegaStarScream]

Hardware wallets are a form of cold storage and if you're referring to the statement in the article linked above:

Binance chief Changpeng "CZ" Zhao has suggested users are more likely to lose crypto by holding it in a cold wallet than by putting it on a centralized exchange.
-snip-
“Most people are not able to back up their security keys; they will lose the device,” he said. “They will not have the proper encryption for their backup; they will write it on a piece of paper, someone else will see it, and they will steal those funds. And also today, very fundamentally, if a person passes away, they don’t have a way to give to their next of kin. Whereas we have a standard operating procedure [for that].”

CZ added that people who are technically capable of holding crypto safely should do so but claimed that the practice has its own issues.

Then this doesn't mean that hardware wallets are not safe. It just means that some people are negligent.

[crwth]

His statements show that he wants to let people know that it's okay to keep your crypto in exchanges. There are still risks involved in having your crypto with a key that you generated. The only problem people would have is that they have done it not understanding how to do it and secure their personal keys etc.

I think that is CZ opinion, but he is very wrong as he only wants people to just hold on exchanges and that is very wrong because of many reasons from lack of full control of your own coins to what could happen like exchange hack and exchange bankruptcy that could lead to exchange users to lose their coins.

I think CZ is wrong with this

Binance chief Changpeng "CZ" Zhao has suggested users are more likely to lose crypto by holding it in a cold wallet than by putting it on a centralized exchange.

You are more likely to lose in trading than holding in your wallet. Just because you can try and risk your coins with that.

[NeuroticFish]

I think CZ is wrong with this

Binance chief Changpeng "CZ" Zhao has suggested users are more likely to lose crypto by holding it in a cold wallet than by putting it on a centralized exchange.

He's... deliberately wrong. It's a declaration that can make some people keep their funds in (his) centralized exchange. Many of his followers trust him ... well, too much.

I've hear people talk about Cold wallets few times before so this question come straight from the mind, are Cold wallet safer than Hardware wallets? Also Binance CEO said Cold wallets are not really safe like people think.  So what am I not getting right?

Cold wallets are wallets set up to never go online. Never.
If set up correctly, if used correctly, if the backups are stored safely and correctly, then they are the safest.
Since most people are not knowledgeable enough to handle this, the next safe option is hardware wallets, which are also much more convenient.
CZ makes declarations that suit him best. He is sometimes correct and sometimes not. Don't just believe all he says.

[Coyster]

Also Binance CEO said Cold wallets are not really safe like people think.  So what am I not getting right?

Binance CEO would say whatever he has to say to ensure that more and more people store their funds on centralized exchanges generally, and since his is the biggest, his platform with get the largest chunk which is good for his business. DYOR about cold wallets and having your coins stored in your non custodial wallet, you'll discover that it is the safest method to store your funds, provided you have studied how to do things right, and how to prevent costly mistakes.

[Rikafip]

‘99% of People' Will Lose Crypto Storing in Self-Custody: Binance CEO Changpeng Zhao

He obviously pulled that number out of his ass, but of course advocates for people not choosing self custody and opting to give their coins to centralized exchanges. I can't believe that even after everything that has happened lately and millions of people lost their money he advice people to do the very same thing that caused them losing their money. Tells you everything that you have to know about CZ really.

[o_e_l_e_o]

are Cold wallet safer than Hardware wallets?

Hardware wallets are usually considered a subset or a type of cold wallet. Good hardware wallets keep your private keys offline, but many of them still require connection to an internet connected device in order to operate, meaning they are not a cold wallet in the true sense of the word. A true cold wallet is usually though of as an airgapped device which is never connected to the internet. It generates and store the private keys offline, signs transactions offline, and then only the signed transactions ever touch an internet connected device to be broadcast.

A true cold wallet in this sense is safer than a hardware wallet if it is set up and used correctly, but this is often too difficult for the average person to do. In that scenario, a good hardware wallet becomes the best choice for that person.

Also Binance CEO said Cold wallets are not really safe like people think.

Next up: Tim Cook says Android products are not safe and Elon Musk says Facebook is trash.

CZ is not your friend. CZ will say anything that strengthen his position and make him more money, even if those statements directly lead to users like yourself losing large amounts of their coins. You would do well to ignore 100% of the things that he says.

[Aanuoluwatofunmi]

are Cold wallet safer than Hardware wallets?

Hardware wallet is under the category types of cold storage, it's also one of the secured means you can adopt to store your coins, both the use of hardware wallet, and other open source cold storage like electrum wallet are a good source to have your asset in as long as they are not centralized on exchanges.

Also Binance CEO said Cold wallets are not really safe like people think.  So what am I not getting right?

What about you, if you're doing a business, will you do all it takes to promote the business or counter against it by exposing your lapses in it, how will Binance exist or survives if everyone takes their coins off centralized exchanges and render them ineffective, of which this is already happening as he has noticed a drop in numbers of people using Binance exchange to cold storage.

[o_e_l_e_o]

and other open source cold storage like electrum wallet are a good source to have your asset in as long as they are not centralized on exchanges.

Electrum is a very good choice of wallet (and is indeed open source), but it is not necessarily a cold wallet. Electrum is a software wallet. Whether it behaves as a hot or a cold wallet depends on how you use it. If it is simply installed on a computer which you use every day and is regularly or always connected to the internet, then it is a hot wallet. Your wallet files and all your private keys are continually exposed to the internet, and such a wallet should only be used for relatively small sums of money. If, on the other hand, you install it on a permanently airgapped computer which never connects to the internet, and use a complementary watch only wallet in order to create and broadcast transactions, only then is it a cold wallet. Doing so keeps your wallet files and all your private keys permanently offline and never exposed to the internet, making it much more secure, but also harder to set up and work with than a hot wallet.

[Outhue]

CZ is trying to keep his business intact, that's all, many funds are been withdrawal from Binance exchange since past days now, no successful businessman will be happy with that.

For our own sakes it is better to keep BTC and ETH in your hardware wallet, CZ knew that this is the best way to be completely safe but it is expected to talk otherwise when it comes to saving his business.

[NeuroticFish]

and other open source cold storage like electrum wallet

You confuse cold storage with a wallet. Cold storage is pretty much a specific way to use a wallet.
Yes, Electrum is nice and easy to be used also as cold storage (meaning always offline, no matter what!), but... I am not sure you know or meant this, hence I recommend you read (much) more about cold storage.

[Cryptomultiplier]

You can't have everything about cold wallet because you are not being specific. Even Oliver Twist knew he had to ask for more over a specific interest at the moment. I doubt you would be able to distinguish everything about cold wallets if it was given to you at the instance.
All am trying to say is, there's really not much to learn about cold wallets. Once you have a need for it, it means you have had some experience using crypto currency, and so the need. A few YouTube videos will show a few pointers, friends on forum or outside here; even Google.
Be sure to understand why you need it first.

[Crypt0Gore]

and other open source cold storage like electrum wallet

You confuse cold storage with a wallet. Cold storage is pretty much a specific way to use a wallet.
Yes, Electrum is nice and easy to be used also as cold storage (meaning always offline, no matter what!), but... I am not sure you know or meant this, hence I recommend you read (much) more about cold storage.

So the offline part is what makes a wallet cold wallet? 🤔 can someone call a paper wallet a cold wallet too? I don't even know this before, I thought cold wallets are separate and centralised where the platform or the centralised entity keeps the key for you, so that means that all those centralized platforms offering people cold wallet are red flags?

[NeuroticFish]

So the offline part is what makes a wallet cold wallet? 🤔 can someone call a paper wallet a cold wallet too? I don't even know this before, I thought cold wallets are separate and centralised where the platform or the centralised entity keeps the key for you, so that means that all those centralized platforms offering people cold wallet are red flags?

I see paper wallet more like a backup of a cold wallet. Because, you know, paper wallet is just a private key (or seed!) and an address you should store on paper, or steel, or whatever (and you may need cold wallet to safely spend it).

Cold storage is, for example, an Electrum that always stays offline. Usually you have on your computer (connected to the internet!) another Electrum too, with a watch-only wallet based on the same seed as the cold storage. This second Electrum will see the transactions, but cannot sign them for spending. And you'll use the cold storage only to sign transactions. Viewing the money flow, creating (unsigned) transactions, broadcasting the transactions after they were signed - these will be done with the watch-only wallet.
The transfer of transactions (from watch only) to cold wallet for signing is best done via images or QR codes, but it can be done (in a bit less safe way) via USB stick. This depends on the wallet software capabilities though.

The (larger) centralized platforms most probably use cold storage too, in a way or another, for safe keeping the bulk of user funds. But they do that for their own safety (hacks cannot touch the cold storage), not for users' sake. The user deposits/withdrawals happen with hot wallet (online wallet). Sometimes, the platform will transfer funds between the cold and hot storage, depending whether there are many deposits or many withdrawals. The use of cold storage don't make the exchanges significantly safer (they can still get bankrupt) and the fact an exchange uses cold storage for their own use doesn't make the cold storage evil. Cold storage is just a tool. Best is to learn and use the same tool for yourself since it's good, no matter who others are using it.

[witcher_sense]

are Cold wallet safer than Hardware wallets?

Indeed they are, but it is only because you never really use them. You instead hide them under the mattress and hope hackers don't come with a wrench. Hardware wallets are a lot better in this regard: they combine the safety of cold wallets (private keys are isolated) and the convenience of software (hot) wallets (very handy in day-to-day transactions). If you aren't sure, go for hardware wallets.

Also Binance CEO said Cold wallets are not really safe like people think.

Binance CEO is partially right: cold wallets are seen as the most effective way to protect your cryptocurrency holdings from unauthorized access, but there are many altcoins that exist that allow such access regardless of how far your crypto is from the online environment. For example, stablecoins can be frozen and stolen even from those wallets that never touched the Internet, all that may happen because the level of their decentralization is rather very low.

[aysg76]

A true cold wallet in this sense is safer than a hardware wallet if it is set up and used correctly, but this is often too difficult for the average person to do. In that scenario, a good hardware wallet becomes the best choice for that person.

Indeed it's safe but as we know most people are not aware about security to that level where they use airgapped devices to keep their funds safely so hardware wallets are really good option for them if they keep the seed phrases safe and physical custody with them.The people need to realise the safety of their funds as they always click on the links they see over internet and have funds or say wallets on the same device which even poses more risk to their funds.So cold storage is safe as your keys never leave your device but hardware wallets treated in similar manner will also work fine for them instead of using these CEX which have 100% risk so they need to realise this ASAP.

CZ is not your friend. CZ will say anything that strengthen his position and make him more money, even if those statements directly lead to users like yourself losing large amounts of their coins. You would do well to ignore 100% of the things that he says.

This is main problem with the people that they believe everything they see over net and these people who have some influence over market to some unaware target audience make them believe what they want for personal profits.If all people would have keep their funds in self custody then would CZ have reached the networth of $17.4B ? He is giving these advices to make you fool so you keep funds with him and they have access to your funds.They put restrictions on your withdrawal,sell your information to governments and much more with zero privacy so still beleive in what he says? Which business person will tell you that go and buy something from other shop as he will say the next one products are not good so he is making same marketing techniques to attract more people to Binance.

The warning on forum from @theymos also indicates not your keys not your coins and if you can't get handle your funds with your custody then what purpose is to invest in decentralised coin like bitcoin? If you want freedom then avoid CEX and ignore these statements as much you can.

[dkbit98]

I've hear people talk about Cold wallets few times before so this question come straight from the mind, are Cold wallet safer than Hardware wallets? Also Binance CEO said Cold wallets are not really safe like people think.  So what am I not getting right?

Oh if CEO master CZ said that than it must be (not) true 
Cold wallets are not connected to internet or other computers and that is very similar with hardware wallets or signing devices.
They are safe if you use them correctly, but people can make anything unsafe including cold wallets, it's enough if they expose private key or seed words.
Best wallets for me are airgapped devices like Passport, Keystone, Coldcard, SeeSigner etc, or Bitcoin dedicated offline laptop with Electrum wallet installed.
If you want portability and use of use than I would choose airgapped hardware wallets.

[o_e_l_e_o]

So the offline part is what makes a wallet cold wallet? 🤔 can someone call a paper wallet a cold wallet too?

Correct. True cold wallets are paper wallets and airgapped computers. There are some airgapped hardware wallets which can be considered true cold wallets too. Some people consider all hardware wallets cold wallets, but this isn't strictly accurate since some hardware wallets connect directly to an internet connected computer.

I don't even know this before, I thought cold wallets are separate and centralised where the platform or the centralised entity keeps the key for you, so that means that all those centralized platforms offering people cold wallet are red flags?

Any centralized platform offering to keep your coins for you is a red flag, regardless of what type of wallet they say they will use. There are literally millions of users who have lost all their coins in the last few months alone from several major centralized platforms scamming them or going bankrupt.

Indeed they are, but it is only because you never really use them.

I don't think that's an accurate statement to make. I have several airgapped cold wallets which I use regularly, and it takes all of 2 minutes to boot up the relevant laptop, scan a QR code, and sign a transaction.

[Peanutswar]

Cold wallets are wallet which is not connected to the internet every time so one of it is the hardware wallets by this you have the full potential that you have your full access to your coins.
Base on that statement cold wallet is not safe because they want their users to store their funds to their exchange which is really not ideal thing to do you can withdraw your funds once they have some things need to fix or in case of bankruptcy.