Is cold wallet better

[pawanjain]

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.

We don't require the hardware wallet device just to see the balance in it. If we have the public key, that is, the addresses holding the funds then we can use any block explorer to see the balance.
To send the funds to someone else we do require the hardware wallet device though.
Yes, there are some people who setup a cold wallet using a computer with no internet access and it is considered safe too if you have multiple backups of the wallet.
But the thing is that we have to be cautious of what we are doing with the computer and how we are accessing it to make transactions from that wallet.

[Zaguru12]

Cold wallet is different from airgapped and I will always choose the latter.

Example of cold wallets are Ledger nano, Trezor and Tangem.
The problems I have with them is the needy to connect to the computer via USB connection, airgapped wallets are not like that, and security wise airgapped wallets are better.

Airgapped hardware wallets uses QR codes and SD cards.
Airgapped wallet is better.

Wow this is news to me, so airgapped wallets are different from cold wallet? But I thought cold wallets are wallets that uses hardware devices to store your coins, without needing the internet, so how is it exactly different from airgapped wallets setup

@KiaKia is wrong there is nothing differentiating a cold wallet from airgapped wallet, airgapped wallet is just another type of cold wallet storage. They are basically just two types of wallet which is hot wallet which are wallets that requires internet connection and then cold wallet which doesn’t requires any internet connection as you have rightly said.

Under cold wallet storage there are different ways to do it either the popular hardware wallets we all know regardless of whether there are airgapped or hot wallets like electrum wallet which can be used on airgapped devices as a cold wallet both saves it’s purpose as a cold wallet since the keys and seed phrase are not exposed to the internet.

[suzanne5223]

Recently, I saw an article about cold wallet in coingeko, 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.

It is not every cold wallet that has the shape of a USD drive, and the security of the crypto your friend has in the wallet is determined by how s/he use the wallet.
No matter how secure the cold wallet is, if your friend uses it in the way that will expose the wallet to vulnerability s/he will still loose the crypto in the cold wallet.

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.

Yes, every self custody wallet has a password, backup seed phrase, and privacy keys, which can be used to recover all the crypto in the wallet. However, you still need to keep them in at least two secure locations.

[Cryptomultiplier]

Cold wallet is different from airgapped and I will always choose the latter.

Example of cold wallets are Ledger nano, Trezor and Tangem.
The problems I have with them is the needy to connect to the computer via USB connection, airgapped wallets are not like that, and security wise airgapped wallets are better.

Airgapped hardware wallets uses QR codes and SD cards.
Airgapped wallet is better.

Wow this is news to me, so airgapped wallets are different from cold wallet? But I thought cold wallets are wallets that uses hardware devices to store your coins, without needing the internet, so how is it exactly different from airgapped wallets setup

@KiaKia is wrong there is nothing differentiating a cold wallet from airgapped wallet, airgapped wallet is just another type of cold wallet storage. They are basically just two types of wallet which is hot wallet which are wallets that requires internet connection and then cold wallet which doesn’t requires any internet connection as you have rightly said.

Under cold wallet storage there are different ways to do it either the popular hardware wallets we all know regardless of whether there are airgapped or hot wallets like electrum wallet which can be used on airgapped devices as a cold wallet both saves it’s purpose as a cold wallet since the keys and seed phrase are not exposed to the internet.

There's of course different types of cold wallets and I can say it depends on what you can afford, and what your plans are for long term.
An air gapped wallet may be for more serious usage that requires long term investment plan of savings and less access to Internet devices, hence why it uses something like QR codes, while a hardware wallet like Trezor or Ledger that you decide to use require USD input or Bluetooth connection to an online device.
The knowledge of your intention is always good because, it is true that cold wallets are also known as self custodial wallets, but the reality is that, not all self custodial wallets are cold wallets.

[Cleanslate_]

Yes cold wallet (hardware wallet) remains the best because it is only used for storing your Bitcoin and are strongly protected from attacks that other software wallets are exposed to, it stores all your private keys, when you want to make transaction you have to connect it to the computer and internet before transactions can be made and all the signing takes place on the device, and the private keys are so secured because it is not exposed to the internet, although it is very expensive but the best to be used .

[Peanutswar]

If your goal is to store your funds and hold into a long term basis ideal to use a hardware wallet because this must need to have a confirmation regarding with the transaction before proceeding not unless someone stole your seed phrase they have now a full access with your assets.

Base on my experience with Trezor wallet which is they have their suite once you connected your device and of course the last sync transaction you can see your balance also there are some blockchains explorers right there so check the amount of your assets if have a good gains or not without opening the wallet itself. Just address needed.

[FjellEcho]

Yes cold wallet (hardware wallet) remains the best because it is only used for storing your Bitcoin and are strongly protected from attacks that other software wallets are exposed to, it stores all your private keys, when you want to make transaction you have to connect it to the computer and internet before transactions can be made and all the signing takes place on the device, and the private keys are so secured because it is not exposed to the internet, although it is very expensive but the best to be used .

Yep, a hardware wallet is usually the safest option for long-term holding, because your private keys stay inside the device and don't sit on an online phone or PC where malware can grab them. But its also worth saying, the hardware wallet isnt the real backup, the seed phrase is. If someone gets your seed words, they can take your coins even without the device. And if you lose the seed words, you cant recover your coin if the device breaks.

So the best setup is simple: buy the wallet from the official source, set it up yourself, write the seed phrase on paper (not in your phone/cloud), and dont share it with anyone. For small amounts, a good mobile wallet is fine, but for bigger savings, hardware wallets are bard to beat.

[Gost ms]

A cold wallet is much better than a hot wallet and your security is much higher than a hot wallet. We often hear about the extension of the wallet being hacked and we hear about the exchanger being hacked. But if we use a cold wallet, then we can protect our funds from all these hacking. If we connect our cold wallet to a computer or any other online device, if there is any kind of malware or virus in that device, then we can lose all our funds. Air-gapped wallets are more secure than cold wallets, this wallet is not directly connected to it online.

[SquirrelJulietGarden]

If we connect our cold wallet to a computer or any other online device, if there is any kind of malware or virus in that device, then we can lose all our funds. Air-gapped wallets are more secure than cold wallets, this wallet is not directly connected to it online.

Do you know what are cold wallets and what are airgap wallets?
Types of wallets: Hot wallets (software wallets) and Cold wallets (Hardware wallets).

Hardware wallets or cold wallets are designed so that when you broadcast your transactions, connect the wallet to computers, Internet, the private keys in that wallets are never exposed to the Internet. It's different with hot wallets.

You can use a software wallet for setting up your airgap wallets on an airgap device, do the set up offline, but if you connect that device to Internet, open your wallet, it will turn to be a hot wallet. While with cold wallets, they are always cold.

[Out of mind]

Cold wallet is the safest and risk-free compared to hot wallet, there is absolutely no chance of cold wallet being hacked, the private key of cold wallet is never directly connected to the internet. Basically, we know that those who hold their bitcoins for a long time use cold wallets, but those who hold funds for a short time and for trading use hot wallets. Hot wallets have risks and are likely to be hacked, but cold wallets and hardware wallets are risk-free, but there are some risks. If the seed phrase is lost or if someone sees the seed phrase, there is a possibility of losing funds.

[Cookdata]

A cold wallet is much better than a hot wallet and your security is much higher than a hot wallet. We often hear about the extension of the wallet being hacked and we hear about the exchanger being hacked. But if we use a cold wallet, then we can protect our funds from all these hacking. If we connect our cold wallet to a computer or any other online device, if there is any kind of malware or virus in that device, then we can lose all our funds. Air-gapped wallets are more secure than cold wallets, this wallet is not directly connected to it online.

You are complicating things together. Cold wallets compromises of hardware wallet and airgap wallet, they both protect your keys from the internet, the only difference between them is the medium of connection which the wallets make transaction, hardware wallet connect connect to the internet through either with USB cable, Bluetooth and some connect through QR code but airgap wallet make use of only micro SD and QR code. Any other connection invalid that wallet as airgap device and it never connect to the internet.

There is nothing bad if you use any of the wallet but maximum security an airgap is preferably. However, if you ar  going to get a hardware wallet, try and avoid ledger wallet, they are never spoken of good reviews, always one small problem to another, users email compromised and many more.

[Coyster]

although it is very expensive but the best to be used .

Nope they are not, hardware wallets are not as expensive as you make it out here. Prices differ based on the manufacturer and the model you want to purchase, but you can get some for less than $100, though there are also others that are more expensive. That said, it depends on how much you want to protect, you'd agree with me that it is wise to spend a few hundred dollars on a hardware wallet to protect thousands of dollars in bitcoin. That's definitely a good "investment".

[Somegory]

Everything else is weak or complicated, buy a airgapped hardware wallet and you will be fine as long as you keep it's recovery seed in a private location and also offline.

Hardware wallet are not so expensive as many people think, you can get them from $60 and more, also if you want to safe some money you can wait for holiday season sales where there is always discount prices on things like hardware wallets.

Cold wallet is safer than hot wallet but don't go for the complicated cold wallet, just invest on getting a hardware wallet like Keystone and you are set for the long term.

[Pmalek]

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.

What you are describing is a hardware wallet. Some people call them cold wallets, but not all hardware wallets are considered as cold wallets. You have your standard USB-connected hardware wallets that connect to PCs or phones with internet access and you have airgapped hardware wallets that you don't connect to PCs and smartphones. Only the latter can be considered cold and airgapped. The most secure systems are completely airgapped PCs, though. But that's a different topic.

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.

Software and hardware wallets store the keys used for signing and proving ownership of your coins. Those keys are on the wallets. Bitcoin never is. What you can lose is the keys. But that's why we have backups of recovery phrases. You should have multiple. The seed is where the keys come from, making it more important than the wallet. You can recover your wallet from seed anytime and anywhere, but if you don't have the seed then there is no recovery. Protect your seed and the wallet will be ok.

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.

A cold wallet stops being "cold" if it's connected to the internet. You should never do that. You make transactions with something we call Partially Signed Bitcoin Transactions (PSBT). The master public key from your cold wallet is exported and imported into a hot wallet with internet connection. The hot wallet generates your receiving addresses, while the cold wallet only signs transactions with its private keys. You move the data back and forth from creation to final signing using an SD card or by scanning QR codes. The cold wallet should never touch the internet.

[Sticky Bomb]

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.

I believe it is also very important to make the SD card read-only, so that it doesn't in anyway affect your cold storage device just in case it is infected from your online device where you've your WOW.

BTW, I've not used the QR code to sign a transaction before, do you mind elaborating on that a little, it sounds pretty interesting. Thanks in advance.

[abaeze]

Yes cold wallet (hardware wallet) remains the best because it is only used for storing your Bitcoin and are strongly protected from attacks that other software wallets are exposed to, it stores all your private keys, when you want to make transaction you have to connect it to the computer and internet before transactions can be made and all the signing takes place on the device, and the private keys are so secured because it is not exposed to the internet, although it is very expensive but the best to be used .

Whether it is a cold wallet or a hardware wallet, a wallet will never provide 100% security to keep Bitcoin safe. In that case, overall security depends 50% on the wallet itself and 50% on how the user handles it. For eg: if someone uses a Ledger Nano X but forgets or loses the Seed phrase when going to make a transaction, then that asset will not be of any use. Again, if everything is fine but due to haste or inattention, send to the wrong address without checking the address on the device screen before sending, then it will also not be of any use that means lost assets. However, the most common reason for losing BTC is the seed phrase being leaked.

Therefore, it is possible to keep Bitcoin safe by writing the seed phrase on paper, not keeping it on mobile phone / cloud / email, never showing the seed phrase to anyone, and checking the complete address very well before sending assets. This is how Bitcoin should be kept safe.

[Cleanslate_]

Cold wallet is better to hold and protect your bitcoin, it also keeps it safe from the internet which exposes them to hackers because that is it's main function.

It helps you store your private keys making them hidden from the internet since it is offline, secures your funds and seed phrase properly which is your backup and you also have to write it down and keep it in a safe place in various places.

[Pmalek]

BTW, I've not used the QR code to sign a transaction before, do you mind elaborating on that a little, it sounds pretty interesting. Thanks in advance.

It's another way of working with PSBTs. You don't need a physical SD card that moves between your online computer and airgapped hardware wallet when signing and broadcasting transactions. You need an airgapped hardware wallet with a camera that supports QR code signing and a companion software wallet, like Sparrow, for example.

You can find videos about it on Youtube and plenty of reading material. Here is a tutorial on the topic that involves Jade and Sparrow. 

Whether it is a cold wallet or a hardware wallet, a wallet will never provide 100% security to keep Bitcoin safe. In that case, overall security depends 50% on the wallet itself and 50% on how the user handles it. For eg: if someone uses a Ledger Nano X but forgets or loses the Seed phrase when going to make a transaction, then that asset will not be of any use.

If you can still unlock and access your hardware wallet, you can make transactions from it. It stores the seed. But without a backup, it's recommended that you create another wallet, back up the new seed, and move your assets there as soon as possible. You don't want to find yourself in a situation where your device malfunctions and gets reset. Then you would be left with nothing.

[MAHICO]

Could you please clarify for me what a cold wallet actually is?

[notocactus]

Could you please clarify for me what a cold wallet actually is?

You have to learn about cold wallets and hot wallets at the same time in order to be able to differentiate these wallets.

• What are the different types of wallets?
• You will have information about software wallets aka. hot wallets, and hardware wallets aka. cold wallets.