What is cold wallet?

A cold wallet, in the context of cryptocurrency and blockchain technology, refers to a type of digital wallet where the private keys required to access and manage cryptocurrency assets are stored offline, typically on a device that is not connected to the internet. Often misunderstood as hardware wallets, it's important to note that any device including an old mobile phone can serve as a cold wallet as long as it remains disconnected from the internet.

Unlike hot wallets, which are connected to the internet and provide convenient access for frequent transactions, cold wallets are kept offline for most of the time. This isolation helps protect the private keys from being compromised by hackers or malware.

Cold wallets can take various forms, including hardware wallets, paper wallets, and even memorized passphrases (known as brain wallets). They are often used for storing large amounts of cryptocurrency that users do not intend to access frequently. Despite their enhanced security features, cold wallets may require additional steps for transactions, such as manually signing transactions offline before broadcasting them to the blockchain network.

CoinWallet offers support for creating cold wallets across various major blockchains. It's crucial to use these cold wallets on offline devices to maintain their effectiveness; otherwise, their security benefits become moot.