The cold wallet: My shield against the digital vultures of the crypto world

Oh my gosh! After losing an embarrassing amount of money when my hot wallet was hacked last year, I have become a bit paranoid about security. And rightly so. Today I want to share my experience with cold wallets and why I believe they are essential in this digital wild west that is the cryptocurrency market.

What the hell is a cold wallet?

To me, a cold wallet is like a personal safe buried in my garden. It is basically a physical device that keeps my private keys completely isolated from the internet. And no, it doesn’t actually store your cryptocurrencies ( this is what many beginners don’t understand ) - everything is still on the blockchain. What it stores is your key to access them.

How this gadget works

Here is the most important part: your cryptocurrencies never leave the blockchain. Your wallet only stores two things:

• The public key ( is your address on the blockchain, like your bank account number )
• The private key ( is the password that proves that those funds are yours )

The great thing about a cold wallet is that it keeps your private key in a digital bunker. Hackers can try to break in for a lifetime! Without an internet connection, it is practically impossible for them to remotely access your keys.

Options I have tried and recommend

Ledger

I have used Ledger for years. It looks like a USB drive on steroids and is more solid than my romantic relationships. What I like the most:

• Keep a bunch of different coins ( who doesn't have their little collection of shitcoins?)
• If I lose it, I can recover it with my seed phrase.
• The interface is so intuitive that even my grandmother could use it.

Trezor

The grandfather of cold wallets. It was released in 2014 and remains relevant, which says a lot. I love how easy it is to set up and that you don't need to be a computer genius to use it.

SafePal

This is the one I am using right now. It has a communication system via QR codes that I think is brilliant - it doesn't even need to connect physically to anything. If hackers want my bitcoins, they will have to come to my house to steal the device. And good luck with that, I have three dogs.

Is it worth spending the money?

Is it worth having insurance for your house? Of course. If you have more than 1000€ in crypto, you're an idiot if you don't have a cold wallet. Exchanges can be hacked ( and they have been ), your computer can get infected, your password can be leaked... Hot wallets are convenient, yes, but leaving large amounts there is like keeping your savings under the mattress with the window open.

Disadvantages that nobody tells you about

Not everything is perfect:

• They are a pain for making quick transactions
• They cost money (between 50€ and 250€)
• You cannot play directly with DApps or DeFi
• If you step on it or accidentally wash it with your clothes, you could have a huge problem.

Questions you always ask me

"Can't they hack cold wallets too?"

Technically yes, but it's much more difficult. The biggest risk is not technological but human: scammers who trick you into revealing your key. No device protects you from your own stupidity.

"Which one do you recommend?"

It depends on your needs, but Ledger Nano X or Trezor are safe bets for beginners. SafePal if you are more paranoid like me.

Look, in the end what matters is that you take control of your digital assets. After seeing how some major exchanges have sunk taking the savings of thousands of people, it seems crazy to me not to invest in a good cold wallet. Don't let strangers take care of your money when you can do it yourself.