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The world is pacing towards advancement. With advancement comes the technological development. In order to adapt to the dynamic environment of this era, one needs to stay updated. The survival of businesses today depends upon the continuous and consistent adaptation to the dynamic technological advancement.

Cryptocurrency

Cryptocurrencies are one of the latest introductions in the world of technological advancement. Cryptocurrencies are one of the digital currencies which are present in digital form which cannot be accessed physically but holds all the properties of physical currencies. It is used as a medium of exchange just like physical currencies. The difference is that it is stored in computerized database using asymmetric key called ‘cryptography’ to keep it confidential.

Unlike other digital bank currencies, the control of cryptocurrency is decentralized. It is done through the virtually distributed ledger record termed as blockchain. Blockchains are records of the timestamp and transaction data. The decentralized control implies public financial transaction database distributed on a computer network.

The public key encryption or cryptography guarantees safely running of currencies on that computer network. It is made sure that the transaction requests are kept confidential, the identities are verified and protected and the ‘double’ virtual spending of these currencies is made impossible. The private key is used while spending the crypto currency.

Bitcoins

There are several cryptocurrencies present in the digital world today. Bitcon, Litecon, Tether, XRP, Ethereum, Chainlink, Cardano, Polkadot and Binance coin are some of them. The largest market capital in the digital world is covered by ‘bitcon’.

Bitcon was released in 2009 as open source software by an anonymous individual or group under the name of ‘Satoshi Nakamoto’. Bitcoins promises lower transaction fees compared to other online transaction mediums. It is the digital crypto currency that means it is controlled by decentralized computer networks. It is traded, distributed and stored in digital ledger, blockchain. It has gained popularity in the digital marketplace and therefore inspired other crypto currency creation in the blockcahin space.

Bitcoins are created as a result of reward mechanism termed as mining. The mining is to done through software that tries to solve a difficult math problem. After the solution is known, the miner makes the solution public in the block.

Each bitcoin is a computer file stored in digital wallet, which could be an app in either a smartphone or computer. Bitcoins are stored in crypto wallet, which stores digital assets.

Crypto Wallet

Digital assets need to be stored in the safest way possible. Crypto wallets could be taken as physical wallets which stores digital security keys or crypto currency tokens.

A crypto wallet is basically software that stores the public and private keys of the crypto currency, send and receive the crypto currencies, keep the balances in check and network in the blockchain mechanism. If you want to securely store your digital assets you need to have a crypto wallet. Crypto wallet can be categorized into hot and cold storages.

Hot storage

The crypto wallet that can be accessed anytime as it is online is termed as hot storage. It is preferred by the users who trade frequently and need to monitor their balances. It is connected to the internet and therefore is more vulnerable. Hackers and malwares can affect hot storages.

Hot storages are handy when you opt to use the daily services that includes, online banking, online transfer, online shopping and so on. With convenience comes risk! Hot storages can be made secure with passwords and pins but these security measures are still vulnerable.

If the private key is hacked or stolen the owner might lose all the coins present in the crypto wallet. This is where the ‘cold storages’ comes in.

Cold storage

Cold storage in the physical world implies food storage for a longer period of time. Similarly if the user wants to hold the digital assets for longer period of time, they opt for cold storage. In simple words, cold storage is offline crypto wallet not connected to internet therefore keeping it safe from the vulnerabilities that might include unauthorized access and cyber hacks.

Cold storage therefore is the storage that signs the private keys of the crypto currency offline. A transaction first is transferred to offline device which may be a USB, CD or any hardware device before transacting online. Signing it in the offline device before transferring it online is the main mechanism of cold storage security. Since the private key does not come into contact directly with the online server; the hacker cannot access the key. With cold storage the risk factor is somewhat completely removed but in addition to it, cold storage makes the transaction quite difficult.

Cold storage includes app, website or any hardware device that manages your transaction and stores the private keys. Cryptocurrency users must check the compatibility of the cold storage wallets with the coins they use. Not all digital assets are compatible with all the cold storage wallets available. There are several options to opt from.

Cold Storage Wallets to choose from

When huge amounts are involved, the best and safest mode of storing the cryptocurrencies is using ‘cold storage’ wallets. There are a number of cold storage wallets in the digital marketplace today. Based on the functionality, convenience and security some are more popular than others.

Hardware Wallets

The safest and sturdiest mode is the hard wallet option for storing the cryptocurrencies. The wallet is in the form of electronic device where you can sign the transaction by using your private keys. These signatures are stored offline on your device. If you happen to lose the device the data can be backed up using the device’s backup seed key. With all the above benefits comes the price tag.

The most used hardware wallets used includes:

Ledger nano S

It is the most popular amongst the available hardware wallets. It is USB flash drive which means it is easy to carry. It can contain more than a thousand cryptocurency tokens! It is priced relatively higher for the security and functionality it offers.

Ledger nano X

It is the upgraded version of the Ledger nano S. It has all the features of the Ledger nano S and in addition to it, it also has some upgraded functionalities. It has a larger screen, battery with larger capacity and Bluetooth feature. You can also install more than 100 wallet apps.

Terzor Model T

The terzor model is not as stylish as the Ledger nano series but it is safe and secure mode of storing your cryptocurrencies. The terzor model T is the second model from the terzor series. It has a large touch screen and it comes with a requirement to set a passphrase of pin before you can enter the hardware wallet. This means you do not have to use a mobile or computer device as it is a standalone device. It can contain up to 1100 cryptocurrencies!

CoboVault

It is open source wallet – Secure Element Firmware. You can see how your private keys get derived from the physically generated entropy and how it stays confined to the element.

The pros of the Hardware wallets

· Restorable

· Secure

· Cannot be copied

· Not perishable

The cons of Hardware wallets

· Expensive

· Breakable

· Not a free resource

· Not waterproof

Paper Wallets

The wallets that are used against the safety of cyber hacks and malwares by the involvement of printing the private keys are the paper wallet. It also has a QR code that can be scanned and added to a software wallet to make transactions quicker. For additional safety it is recommended to duplicate an additional copy of the keys and encrypt it.

Pros

· Easy to carry

· Free to use

Cons

· One can see and steal it

· Burnt or torn easily

· Not waterproof

· Not restorable

Sound Wallets

The sound wallets are not so popular cold storage wallet used to store the cryptocurrencies. Sound wallet encrypts the private keys in audio files and stores it in devices like compact discs (CD). The encryptions can be decoded using a spectroscope app.

Pros

· Secure

· Restorable

· Price efficient

· Waterproof

Cons

· Not an easy way

Desktop Wallets

The desktop wallet includes the encrypted files of the private key in your desktop computer. The encryption is done in an offline environment. The keys are stored offline on your computer but when you transfer them you connect your machine to the internet.

Pros

· Easy to use

· Price efficient

Cons

· Possibility of physical damage

· Not restorable

The Takeaway

Today cryptocurrencies are becoming popular with the advancement of technology. Not only the business world but even investors consider the cryptocurrencies as investment opportunity. With ever changing technological uncertainty and vulnerability cryptocurrency storage should be given more attention. The most secure mode of storage is the ‘cold storage’.

Choose the cold wallet as per your need, budget, functionality, safety and convenience. Digital assets need to be stored in digital wallets. And cold wallets are the best digital wallet in the digital marketplace. Secure your cryptocurrency today to prevent yourself from the hassle of tomorrow.

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