Crypto Cold Storage – Decoding the Myths and Misconceptions

crypto hardware wallet

Cold storage is one of the most secure ways of storing long-term cryptocurrency holdings. Keeping the private keys offline in cold wallets eliminates the risk of theft from internet connectivity. However, people are still skeptical, and several misconceptions surround crypto hardware wallets and cold storage devices. This write-up will help you bust the most common myths and misconceptions surrounding cold wallets and ensure optimal crypto safeguards.

Myth 1 – Cold storage is only good or large holdings

Reality – Cold storage is great for both large and small balances. Offline safety and security are applicable regardless of the number of crypto assets you hold in the wallet. Even a small token is worth safeguarding in cold storage. The one-time cost of a crypto hardware wallet does pay off due to enhanced security.

Myth 2 – Cold wallets are only great for long-term holdings

Reality – Yes, cold storage does offer excellent long-term security, but you can utilize the wallet for any holding period. These wallets are secure, and you can benefit even from shorter-term holdings. Cold wallets offer offline security, and transferring crypto when trading or cash out is easy.

Myth 3 – Paper wallets are a kind of cold wallet

Reality – Paper wallets keep the keys offline, but there are a few risks when comparing them with crypto hardware wallets. The printed QR codes can start degrading over time, and the paper wallets lack the hardware wallet’s user-friendly features like easy sending and receiving crypto and PIN protection.

Myth 4 – Software wallets are used as cold storage

Reality – A true cold wallet must be completely disconnected from the internet if you want to use it as cold storage. Software wallets are not for cold storage as they create mobile and paper backups that depend on internet connectivity, and therefore, they are hot wallets.

Myth 5 – Cold storage is FREE!

Reality – There is a cost to the crypto hardware wallet you purchase to keep your crypto safe from theft. While the cost of the wallet is not exorbitant, there is an upfront expenditure that you need to make for proper cold storage. The purchase is worthwhile, as you pay for enhanced security and peace of mind.

Also Read: Top 7 Best Cryptocurrency Exchanges in 2023

Myth 6 – Physical location matters less for cold storage

Reality – The crypto hardware wallet is durable, yet the physical location does matter. To ensure the best security, you must keep the wallet hidden and in secure locations so that it can’t be easily found and there is no physical tampering with the wallet. The offsite storage of the wallet adds to its redundancy.

Myth 7 – Crypto is illiquid in cold storage

Reality – Did you know that crypto hardware wallets make crypto transfer easier than you believe? You can connect to sign in brief transactions and then disconnect again. The crypto is never permanently locked up, and liquidity remains high even when the keys are offline and well-protected from cyber theft.

Myth 8 – Choosing between security and convenience

Reality – High-quality crypto hardware wallet balance between security and convenience. Mobile connectivity via QR codes and Bluetooth allows usage while keeping the keys offline to ensure security. Features like apps and touchscreens ensure easy access without any security sacrifices.

Myth 9 – Wallets are pointless because of recovery phrases

Reality – The recovery phrase safeguards the device from loss or damage. On the other hand, a dedicated cold wallet has significant security benefits that cannot be ignored. The crypto hardware wallet device offers additional security against phishing attempts during crypto transactions. The crypto hardware wallet device has encryption, PIN, and tamper-proof protection, which recovery phrases don’t have in them.

Choosing crypto storage? The colder, the better and more secure

The crypto hardware wallet offers the highest level of security, which is why it’s mostly recommended by credible novice and veteran crypto players. Some wallets are quite affordable, but it is always better to choose wallets from trusted, reputable, and proven brands, even if the device price is on the higher side. The wallet price is definitely a consideration, but choosing an inferior cold wallet with a lower price tag means that you are compromising on quality, which can make you spend more in the long term in the form of lost assets when the device is cheaper and more vulnerable.

Are cold wallets right for everyone?

When you choose cold storage, you keep the private keys offline and in a secure environment that is physically disconnected from the internet. Without an internet connection, it is literally impossible for the hackers to steal your crypto. No internet connectivity ensures protection from malicious software that can access and steal your digital assets. This is the reason why Ellipal cold wallets are highly recommended than other alternatives in the market. These wallets are highly secure and suitable for everyone. Depending on your requirements and knowledge level, cold storage can prove to be highly beneficial to guard your crypto assets against theft. However, if regular transactions and withdrawals are necessary, for cold wallets, you need to take additional steps than the online counterparts, which are the hot wallets – and all this pain makes the cold wallets more secure!