Cold Wallet

A cold wallet, or cold storage, is a wallet whose private keys never touch an internet-connected device. The most common form is a hardware wallet, a small device that signs transactions internally and only sends the signed result to a computer. Other forms include paper wallets with keys printed on them and air-gapped computers that are never connected to a network.

Because the keys are offline, remote attackers cannot steal them through malware or hacked websites. To move funds, the owner must physically have the device and confirm the transaction on it. This makes cold storage the standard for exchanges, ETF custodians, and individuals holding amounts they would not want to lose.

Cold storage shifts the risk from hacking to physical loss and user error. The device can be lost, destroyed, or stolen, so the seed phrase backup matters more than the hardware. A cold wallet also cannot protect you from signing a bad transaction: if you approve a malicious contract on the device, the funds are still gone.