Everyone has heard it - "Cold storage is safe storage" - But, what does that even mean? Well, to put it simply, cold storage is taking your cryptocurrency off-line to keep it safe from internet threats. This is a simple process but does take a minute to learn.
There are three major places to keep your cryptocurrency.
On an exchange - In a software wallet - on a hardware wallet.
An Exchange is an online platform where you can buy, sell, and trade various cryptocurrencies. Most exchanges keep control of your Private Keys. A Private Key is the address where your coin is stored. If you do not have access to the Private Key then you are vulnerable to theft/hacking or an exchange going down. When an exchange goes down for good, you lose your crypto for good. There have been a few situations where people lose their crypto due to it being online and the wallet get's hacked. This is worst case scenario but luckily, it's avoidable.
Software wallets are very popular. These can be desktop or mobile wallets and usually they give you access to your Private Keys. This is really important when picking a software wallet. If your software wallet does not give you the private keys you may not be any safer than you were on an exchange. Make sure you use a software wallet like Exodus which gives you recovery options and private key address info.
This is the most popular form of cold storage and the most secure. Hardware wallets give you full control of your cryptocurrency. You can store and transfer your coins as needed when using a hardware wallet. The Nano S is a great hardware wallet and can be used with a SafeLedger to back up the seed words, password, and any other recovery options. You can also store your private key info on SafeLedger in case your hardware wallet breaks, gets lost, or is ruined.
When using a software or hardware wallet, you want to make a back up of all log-in information, backup passwords, 12-24 word seeds, public and private address, and any notes you may want about the wallet/coin. SafeLedger+ makes this process easy and secure. Check out our other blog to learn how to backup your software and hardware wallets.