Do you know what Cold Storage is?
The principle of Cold Storage is to secure your cryptos assets, offline (far from any internet connection).
The main principle of cryptocurrencies, is that it's inviolable, this "money" is in fact only a quantity of data, to have access to "precisely this data" you must have what is called the "Private Key" (unlike the Public Key, which represents your Wallet address, and which can be given to anyone, because with this information, you take no risk), while it (and as its name suggests) is private, and YOU ONLY should be the holder.
A Private Key can be composed of 52 random alphanumeric characters, even if you take the most powerful computer in the world, which will make millions of guesses per second, for millions of years, it is virtually impossible for someone to find it. It can also be a list of 6 to 24 random words.
But then you think, "Okay, maybe, but then how come we often hear that such and such a site has been hacked and stolen for millions of dollars in cryptocurrencies"?
Well the answer is quite simple! The Hackers got their hands on the Private Keys that (obviously) were stored on the sites concerned! Quite simply, they took advantage of a security flaw, and they were able to have access to all the users' Wallets, because they had the "Private Keys" in their possession!
So in fact, the principle of Cold Storage is to keep the Private Key away from any internet connection, making it virtually inaccessible, and making your assets totally secure!
But to secure that Private Key, you don't have to do it just any way. Here's how you can secure it offline:
- Write it down on a piece of paper
- Using an external hard drive
- A USB key
- Burn it on a CD
- Engrave it on a metal piece
- Or opt for the "Brainwallet", which means that you have to memorize this Private Key.
What you must not do, however, is this:
- Save the Private Key on your computer.
- Take a picture of her
- You send it to yourself by email
- Print it...
Cold Storage, unlike banking institutions as we know them, eliminates a (trusted) third party, so if by misfortune you lose this Private Key, you also lose access to your funds, they will be irretrievably lost.
Cold Storage is currently the safest way to secure your cryptos assets, but there are a few drawbacks to be taken in consideration
- The paper, can tear, burn, the anchor can fade over time...
- The USB key or external hard drive may be compromised.
- The CD is a technology less and less used, and less and less computers can read it.
- The metal part can be lost
It is up to you to take care to store this Private Key, in the best possible conditions.
Thanks to all of you for holding so far, I hope this article will have taught you 2-3 little things, to secure your cryptographic assets.