Cold Storage
CryptoGlossary term
Definition
A method of storing cryptocurrency offline, completely disconnected from the internet, to protect it from hacking, malware, and unauthorized access. Common cold storage methods include hardware wallets, paper wallets, and air-gapped computers. Cold storage is considered the most secure way to hold cryptocurrency for long-term investors who do not need frequent access to their funds.
Related terms
- Wallet (Cryptocurrency)A digital tool that allows you to store, send, and receive cryptocurrencies by managing your private and public keys. Wallets can be software-based (apps or browser extensions), hardware devices, or even paper printouts. They do not actually store your crypto but rather store the keys that prove your ownership of assets on the blockchain.
- Private KeyA secret alphanumeric code that gives you full control over your cryptocurrency holdings and the ability to authorize transactions. Your private key must be kept secure and never shared, because anyone who obtains it can access and spend your funds. It works in conjunction with a public key to enable secure, encrypted transactions on the blockchain.
- Seed PhraseA series of 12 or 24 randomly generated words that serves as a master backup for your cryptocurrency wallet. If you lose access to your wallet device or application, you can use the seed phrase to recover all of your accounts and funds. It is critically important to store your seed phrase securely offline, as anyone with access to it can gain full control of your wallet.
- HODLA term originating from a misspelling of 'hold' that has become a popular crypto investing philosophy meaning to buy and hold cryptocurrency for the long term regardless of market volatility. The strategy is based on the belief that despite short-term price swings, crypto assets will appreciate significantly over time. It has also been retroactively interpreted as an acronym for 'Hold On for Dear Life.'
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