Is cold wallet better

[Eclipse01]

Recently, I saw an article about cold wallet in coingeko here, talking about cold wallets, I then remembered a friend of mine back in 2022, that was hitting it big back then in the crypto space, he bought 2 cold wallets and decided to store it there, I asked why, he said for security, he went on to explain how it works, it's basically like a storage device/memory card although it's shaped as a USB drive, you store your crypto data in there.

I was like is this truly secured, what if u lost it and this can literally be stolen, he said it was password protected and it do have recovery phrase, tha blew my mind, it's like holding your crypto in your hand literally.

In my Opinion, I think cold wallets are the best, for those who might not know what I'm talking about, Cold wallet are offline or hardware wallets, although the article explained it more, they are crypto wallets that lets you store your crypto with a passphrase in a hardware device that is not connected to the Internet, unlike your hot wallets like trust wallets, metamask e.t.c it can't be accessed through the internet, it doesn't have a server or IP address unlike your hot wallet.

Although, if you want to send and see your balance, you have to connect it to your computer and with the Internet, but the wallet itself is offline. Some people set up a local computer with no Internet access as their cold wallet but is this really feasible.

[Ruttoshi]

Of course, electrum cold storage wallet is good and very safe because you did the set up yourself. When generating the private keys it should be in an airgapped device and stays offline forever. You need a watch only wallet which can be a hot wallet to monitor, sign and verify transactions. I prefer this to a hardware wallet based on my own reasons.

Keeping your seed phrase safe is very important which is why you should make three duplicates and store them in three different locations far from each other. Same should apply to your passphrase. Keep your passphrase in a different place from your seedphrase.

[Zaguru12]

Although, if you want to send and see your balance, you have to connect it to your computer and with the Internet, but the wallet itself is offline. Some people set up a local computer with no Internet access as their cold wallet but is this really feasible.

Yes the best form of wallet storage still remains a cold wallet storage. Firstly I will say you shouldn’t actually follow up on some recommendations on certain hardware wallets by coingecko because some of them are not that reliable or reputable most especially ledger wallets, stay clear from them. You can search for good airgapped wallets which are open source and get good recommendations on this forum.

As for if it’s feasible for local computer to be use as cold Wallet I will say yes it’s possible but it’s actually a bit tricky because you might have to set it up totally as a an airgapped device and then use it with compatible wallets like electrum wallet . But the device should never have had internet connection or would ever have internet connection because only this will gurantee it’s actually full airgapped, a little set up mistake will render your wallet as hot wallet without you knowing, it’s the reason why I prefer newbies to actually just go for hardware wallet.

You don’t need to actually have to connect to any computer before you see your balance from the hardware wallet, you can simply import your address or public key to an online wallet and use it as a watch only wallet.

Lastly the security of any wallet depends on the user how the back up phrases and keys are protected

[hugeblack]

Although, if you want to send and see your balance, you have to connect it to your computer and with the Internet, but the wallet itself is offline. Some people set up a local computer with no Internet access as their cold wallet but is this really feasible.

It's best to use air-gapped wallets as they don't and won't connect to the internet. Cold Wallets have a weakness: if there are viruses on the computer you're connected to, you could lose your funds.

[bitbollo]

Absolutely correct @hugeblack
I would just add that https://glacierprotocol.org/ provide all instructions to create your own cold wallet in the safest way possible (and explains also where are the "reasons" for each passage).
Of course this guide could appear extreme to some newbie, but at the end we are talking to a system that try to be "the state of the art" for cold wallet.

[Itz-prisigold]

The real value of a cold wallet is not just the fact that it's offline, it's actually the extra layer of discipline that cold wallet brings, while with a hot wallet, it is very easy to click the wrong link, incorrectly approves a bad transactions or even falls for a phishing trick. It’s a lot easier to make a mistake with a hot wallet than a cold wallet, A cold wallet makes you think through before doing anything and that alone reduces mistakes.

I also like the fact that cold wallets naturally support long-term holding, when your funds are not always connected to the Internet, you are less likely to be tempted to trade emotionally. It kind of pushes you to develop a long-term investing mindset rather than trade them back and forth, and there is also no magic in cold wallets, they require you to be responsible. If you lose your recovery phrase or the wallet itself, there is no customer support to help you out, It becomes a question of how responsible the user is instead of how good the wallet is.

Using a fully offline computer may offer you a stronger security, the setup and maintenance make it unrealistic and very stressful for most users, It is also a little more complicated than it needs to be when hardware wallets can offer the same peace of mind.  I believe that cold wallets are the best option for users that value strong security and that are very ready to take complete responsibility for their crypto.

[Cookdata]

In my Opinion, I think cold wallets are the best, for those who might not know what I'm talking about, Cold wallet are offline or hardware wallets, although the article explained it more, they are crypto wallets that lets you store your crypto with a passphrase in a hardware device that is not connected to the Internet, unlike your hot wallets like trust wallets, metamask e.t.c it can't be accessed through the internet, it doesn't have a server or IP address unlike your hot wallet.

I think you are mixing things together. Cold wallets are general wallets that store your seed phrase and private keys offline and examples are hardware wallet and airgap wallet. However, hardware wallets still connects to a internet medium to be able to function properly, some connect through USB cable and Bluetooth while airgap wallet never make any connection. You need only scan transaction through QR code and SD card to sign a transaction.

Although, if you want to send and see your balance, you have to connect it to your computer and with the Internet, but the wallet itself is offline. Some people set up a local computer with no Internet access as their cold wallet but is this really feasible.

This is feasible but the best way to do it is use Tails OS on your computer, it's one of the best operating system for privacy. If has an inbuilt electrum wallet.
What you should do:
Download Tails OS, verify it that you downloaded the authentic OS, and then flash it on your USB.
Disconnected the internet and remove your wifi and bluetooth card from your laptop(some do have Bluetooth and wifi together).
Off your laptop and plug the USB on your laptop and let it boot, it will load up in less than a minute. That way you can use the electrum as cold wallet, make sure to copy and backup your seed phrase.

You need a watch only wallet which can be a hot wallet to monitor, sign and verify transactions. I prefer this to a hardware wallet based on my own reasons.

If you are going to use hot wallet and and airgap device, hot wallet should only be use to create a transaction and not sign with it like you said. The purpose of an airgap device is to keep your keys safe from internet and that's where you sign transaction through QR code or an SD card.

[Free Market Capitalist]

Cold Wallets have a weakness: if there are viruses on the computer you're connected to, you could lose your funds.

Really? As far as I know, what can happen if you have a virus is that your destination address is changed and you end up sending the funds to a hacker, but you need to manually approve each transaction and if you check them carefully, the risk of losing funds is zero.

[Aanuoluwatofunmi]

In my Opinion, I think cold wallets are the best, for those who might not know what I'm talking about, Cold wallet are offline or hardware wallets, although the article explained it more, they are crypto wallets that lets you store your crypto with a passphrase in a hardware device that is not connected to the Internet

Cold storage is more preferred for storage than hot wallets, but we also have to understand the way we can safely secure the seeds phrase or private keys that we generate for our wallet, because this is the most important part of it, whereby if we cant trust the means for their storage, anyone could gain access to it and take on what belongs to us, hence the need for us to learn more about privacy and security.

[coinrifft]

In any case though, regardless of what kind of wallets we are using, cold or even top tier hard wallets, it won't save us if we don't know to practice safe hygiene like how to properly back up our seeds. If your OPSEC is sloppy then you will still lose your crypto.

So it's better to study OPSEC first and then apply it. The weak point usually isn’t the hardware, it’s the user’s security habits.

[Catenaccio]

Of course, electrum cold storage wallet is good and very safe because you did the set up yourself.

Electrum is a SPV wallet (also open source) and can be used to set up a cold wallet as well. You must use Electrum wallet rightly from download, verify to set up your wallets. Three guides below are helpful for you and anyone want to use Electrum wallet rightly and safely.

[GUIDE] How to Safely Download and Verify Electrum.
The paranoid user's security guide for using Electrum safely.
Creating a cold storage wallet in Electrum.

[Charles-Tim]

While using cold wallet, be careful of clipboard malware. Make sure you check the recheck the address that you are sending to before you send the coin. Make sure you send to the correct address.

Although, if you want to send and see your balance, you have to connect it to your computer and with the Internet, but the wallet itself is offline. Some people set up a local computer with no Internet access as their cold wallet but is this really feasible.

If you want to check your balance, you can make use of blockchain explorer. If you want anonymity, use Tor to connect to the blockchain explorer. Or probably VPN can be good but Tor is better.

The best is to set up a watch-only wallet which can be used also. You can use Tor to connect to the watch-only wallet for anonymity.

[satscraper]

a friend of mine back in 2022, that was hitting it big back then in the crypto space, he bought 2 cold wallets

Your friend probably bought two hardware wallets.

Two hardware wallets are better than one if the come from different manufacturers.

You may ask why. With two hardware wallets you can create the multisig setup in which both devices act as cosigners. This setup is more secure than relying on single hardware wallet.The single device can be compromised ^{even through the vulnerability coming from developer's side, release of firmware with backdoor for instance} but the probability of both devices being compromised simultaneously is far lower.

[Eclipse01]

a friend of mine back in 2022, that was hitting it big back then in the crypto space, he bought 2 cold wallets

Your friend probably bought two hardware wallets.

Two hardware wallets are better than one if the come from different manufacturers.

You may ask why. With two hardware wallets you can create the multisig setup in which both devices act as cosigners. This setup is more secure than relying on single hardware wallet.The single device can be compromised ^{even through the vulnerability coming from developer's side, release of firmware with backdoor for instance} but the probability of both devices being compromised simultaneously is far lower.

Wow....this is a rich knowledge, he didn't explain it in details like this though, he just said this one is for backup or something like that, it's being a long time anyway.

In any case though, regardless of what kind of wallets we are using, cold or even top tier hard wallets, it won't save us if we don't know to practice safe hygiene like how to properly back up our seeds. If your OPSEC is sloppy then you will still lose your crypto.

So it's better to study OPSEC first and then apply it. The weak point usually isn’t the hardware, it’s the user’s security habits.

What is OPSEC please.

Cold Wallets have a weakness: if there are viruses on the computer you're connected to, you could lose your funds.

Really? As far as I know, what can happen if you have a virus is that your destination address is changed and you end up sending the funds to a hacker, but you need to manually approve each transaction and if you check them carefully, the risk of losing funds is zero.

So it is difficult to loose funds from a cold wallet then.

Well I guess safety is paramount, and no one can be too careful so as to not make a single mistake, but having that later of protection alone by using a cold wallet is really reassuring, and I will check out how to set up one using a remote airgapped computer

[Mpamaegbu]

Although, if you want to send and see your balance, you have to connect it to your computer and with the Internet, but the wallet itself is offline.

This makes it look regular too. In spite of all the merits attributed to it, connecting it to an Internet to assess it makes it also vulnerable in my books like other wallet apps. It's the same way I can get an Electrum wallet for my stash and decide not to connect it to an Internet until I want to withdraw it. Each time I feel like depositing to that address, I just send there.

In fact, the hardware even makes it risky for those holding it as upon seeing a USB look alike, anyone can tell it's for storing something. Criminally minded folks may prob to check what's inside and that can endanger the life of who's holding it.

[Odohu]

The method of storage you will adopt depends mostly on what you are doing with those coins. For instance, if you are trading or using your Bitcoin for business such as those that accept and pay in Bitcoin, then you will not go for a cold wallet but hot wallet because of the challenge of accessibility. On the contrary, if you have no plans of moving those coins for a long time, then a cold wallet is the best choice.

Of course, electrum cold storage wallet is good and very safe because you did the set up yourself. When generating the private keys it should be in an airgapped device and stays offline forever. You need a watch only wallet which can be a hot wallet to monitor, sign and verify transactions. I prefer this to a hardware wallet based on my own reasons.

I know this to be a very good alternative that anyone who does not want a hardware wallet but I have never made comparison. Hence, I would love to know some of the things that made you think that it is better than hardware wallet which I believe is the safest method of storing Bitcoin.

[dzungmobile]

Your friend probably bought two hardware wallets.

Two hardware wallets are better than one if the come from different manufacturers.

There are many hardware wallets: close source and open source. In Bitcoin and cryptocurrency, it's always safer to use open source wallets exclusively hardware wallets and diversifyingly storying your bitcoin in different hardware wallets from different brands is a good strategy.

[LIST] Open Source Hardware Wallets.

What is OPSEC please.

You can search and easily find what OPSEC means.
OPSEC: Operations Security.
https://en.wikipedia.org/wiki/Operations_security

[Zaguru12]

Cold Wallets have a weakness: if there are viruses on the computer you're connected to, you could lose your funds.

Really? As far as I know, what can happen if you have a virus is that your destination address is changed and you end up sending the funds to a hacker, but you need to manually approve each transaction and if you check them carefully, the risk of losing funds is zero.

This still depends on the type of hardware wallet or the software wallet it is connected to, one thing that is certain is that private keys and seed phrase on hardware wallets cannot be accessed or generally it the hardware wallet itself cannot be infected directly from the virus or malware on the device it is connected to, but there is a chance of keylogger can be used to detect what you’re typing if the hardware wallet uses the device keyboard example of such wallet I can recall is Trezor One and not it’s personal keyboard. So if the hardware wallet is like this then information can be stolen. But aside this I don’t actually see how hardware wallet can get infected from an infected device.

[salad daging]

While using cold wallet, be careful of clipboard malware. Make sure you check the recheck the address that you are sending to before you send the coin. Make sure you send to the correct address.

This is often what many people ignore about clipboard malware where they don't check the destination address wallet anymore, because their computer could have been unknowingly infected with clipboard malware.

Two hardware wallets are better than one if the come from different manufacturers.

You may ask why. With two hardware wallets you can create the multisig setup in which both devices act as cosigners. This setup is more secure than relying on single hardware wallet.The single device can be compromised ^{even through the vulnerability coming from developer's side, release of firmware with backdoor for instance} but the probability of both devices being compromised simultaneously is far lower.

Ohh so with two different devices from different manufacturers can make multisig settings? So that to send coins there must be a co-signer from both devices?

Maybe you can share a thread or article where to create a multisig setup with two devices of different brands.

[Charles-Tim]

This still depends on the type of hardware wallet or the software wallet it is connected to

I am very sure that hugeblack is referring to clipboard malware. Also that is the malware that Free Market Capitalist is referring to. The cold wallet or the hardware wallet does not need to get infect before clipboard malware will do its work because the address would have changed on the online device like phone or computer to a hacker's address.

Ohh so with two different devices from different manufacturers can make multisig settings? So that to send coins there must be a co-signer from both devices?

Maybe you can share a thread or article where to create a multisig setup with two devices of different brands.

You can even use online wallet and hardware to set up a multisig wallet. If you know how to set up multisig wallet, you will not find it difficult to do.

https://electrum.readthedocs.io/en/latest/multisig.html
https://bitcoinelectrum.com/creating-a-multisig-wallet/
https://bitcointalk.org/index.php?topic=5039220.0 (paste the image links on an image uploading website to get the image).