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Glossary

Cold Wallet

Plain-language definition

A cold wallet is a way of storing the private keys that control your crypto entirely offline, so they are never exposed to an internet-connected device.

How it works

Cold storage keeps keys on a device or medium that has no live network connection — commonly a dedicated hardware wallet, or even a paper backup of a seed phrase. To send funds, the transaction is signed on the offline device and only the signed result is broadcast, so the secret key itself never touches an online machine. Its counterpart, a hot wallet, stays connected for convenience.

Why it matters

Because most thefts happen through internet-connected software, keeping keys offline removes the largest attack surface. Cold wallets are the standard choice for holding larger amounts long term, with the trade-off of being less convenient for frequent transactions.

Example

Storing the bulk of your holdings on a hardware wallet kept in a safe is a typical cold-storage setup.

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