Cold storage in cryptocurrency
How are you? Hope so everyone would be safe and sound just like me as I am also safe Alhamdulillah...
Today I am going to share my post which is related to topic cold storage in which I would like to share it's definition it's diaadvantages and advantages and it's working so it would be a quiet informative post for all of you.
When someone wants to keep digital tokens offline in secure way then it means that a person wants to keep digital tokens in secure way. In this way a user can protect his self from any kind of potential hacking or theft.In this way cryptocurrencies are stored on hard wallets or paper wallets and this wallets are not connected to the internet connection. Basically behind mechanism is that private keys are generated by these wallets that give access to you at your funds.
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If I talk about it's working then cold storage works in a very simple way and for this let's take an example of hard wallet that how it works.
Hardware wallets store cryptocurrency private keys in offline way. As these keys are offline that's why it keeps away online threats and in this way acts and extra layer of security. So for authorising the transaction that you want to make you have to connect your hard wallet to your mobile phone or to your computer and in this way your private keys can never leave the device you can understand and hands it reduce the risk of being your keys compromised and give your transactions to you in the most safe way.
If I talk about most popular hardware wallets then these are ledger nano x and trezor model T but in terms of security most of the time we prefer ledger nano x because of its characteristic of having the features just like the Bluetooth connectivity.
| Advantages | Disadvantages |
|---|---|
| One of the most common advantage of cold storage is that it keeps the private keys secure offline | In comparison to hot wallet cold storage is not more easy to use because you have to connect hardware wallet for making sure your transactions |
| Online attacks can be minimised by the use of cold storage | Cold storage requireds more careful handling from users. |
| Cold storage can give you mental satisfaction that your assets or your digital tokens are secure and in this way you feel calm | cold storage can require long time from you because I have already that there is a long process somehow in which you have to connect your hard wallet for transaction making. |
Cold storage is one of the most secure way for making sure your transactions safe in the form of hard wallets but instead of this we all know there are many disadvantages of it also but if we neglect these little bit disadvantages then we would feel it one of the most valuable way to making sure our transactions going on safe side.
That was all about my knowledge that I have shared in my simplar words with all of you so hopefully everyone would like it.
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Hello @khursheedanwar,
Please increase the quality of your post, there are more explanation to cold storage, please take note
It was good try by me but still I'm failed to satisfy you but I assure you that next time my entry with a unique post would make you happy
Okay, this is good to know, weldone bro
👍