By definition, any form of cryptocurrency wallet that is not connected to the internet is considered a cold wallet. In comparison with a hot wallet, which is connected to the internet, cold wallets are generally considered more secure since they keep a user’s private keys offline.
Types of Cold Wallets
Paper wallets are one of the simplest forms of cold storage, as the public and private keys are directly printed or written on them. This is a very safe method in terms of preventing theft; however, the risk lies with the fragility of the paper and reliability of the owner to not lose it. For example, the piece of paper can be easily lost, damaged, or destroyed, which causes the wallet’s funds to be irretrievable.
Hardware wallets are physical devices that often resemble a USB drive. When not in use, they are typically disconnected from any other device, making them tremendously difficult or near impossible to hack into. Hardware wallets are considered one of the safest alternatives for storage.
Sound wallets use compact discs (CDs) or vinyl disks (records) to store a user’s encrypted private keys in sound files. In most cases, these audio files are deciphered using high-resolution spectroscopy (HRS).
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