Recently, more and more people around me are asking about cold wallets, which actually reflects a phenomenon—everyone's demand for self-custody assets is indeed increasing. To be honest, using hot wallets is convenient, but if you don't manage private keys and seed phrases properly, problems can easily occur; I've heard too many cases of coins being lost.

I myself only started paying real attention to cold wallets after experiencing a few scares. After all, storing long-term holdings on offline devices makes me feel much more at ease. But the problem is, there are many types of cold wallets on the market, and choosing the right one requires some consideration.

First, let's talk about what exactly a cold wallet is. Simply put, it’s storing your private key on an offline device, generally referring to hardware wallets, but also including paper wallets. The counterpart is a hot wallet, which is a software wallet installed on your phone or computer, convenient but with higher risk.

The working principle of a cold wallet is actually not complicated. It first generates a pair of public and private keys; the public key is your address, which can be shared openly to receive coins. The private key is like a password, controlling all assets in the wallet. To make it easier to remember, there are seed phrases, usually 12 or 24 English words. The key point is that all these are stored on offline devices, making it inaccessible to hackers and malicious software.

Currently, I’ve come across several popular hardware wallets on the market. imKey is produced by the team behind imToken, using an Infineon chip, with a high level of security certification, costing around $130, and weighing just over 8 grams, making it quite portable. Ledger Nano is made by a French company, supporting over 5,000 coins, with the most comprehensive features, priced between $150 and $300. Trezor, from a Czech company, features a touchscreen, supports over 1,400 coins, and is relatively affordable, costing between $70 and $219.

When choosing a cold wallet, I usually look at four aspects. First is security, which is the core—look at encryption algorithms, multi-factor authentication, etc. Second is compatibility—must support the coins you hold. Third is cost—different price ranges are available, so consider the value for money. Fourth is user experience—some interfaces are very intuitive, while others are more cumbersome. This information can generally be found on official websites, and user reviews are also helpful.

Using a cold wallet also involves a process. If you don’t already have a public/private key pair, generate one via a cold or hot wallet first. Then, when making transactions, connect to your phone or computer, enter your PIN to unlock. After initiating the transaction, verify and confirm on the device. Once the transaction is complete, disconnect, and the private key returns to offline status.

A very important detail—never connect to unknown DApps, or the advantages of a cold wallet are lost. Also, after purchasing a hardware wallet, it’s best to back up the seed phrase and private key on paper or a USB drive, in case the hardware fails.

The difference between cold and hot wallets is quite clear. Cold wallets store assets offline, offering high security but more cumbersome operation, costing between $50 and $500 for hardware. Hot wallets are online, easy to use, free, but with higher attack risks. My advice is, if you’re holding assets long-term or making large transactions, it’s safer to keep your assets in a cold wallet.

If a cold wallet is lost or damaged, don’t panic—if the private key and seed phrase are still safe, you can restore your assets by buying a new wallet. The worst case is if you forget the seed phrase, then it’s truly irreversible. So, be sure to back up these “passwords” offline, and if possible, store them in a safe deposit box. Also, stay vigilant against hackers and scams—avoid claiming airdrops casually, and don’t store private keys online.

Overall, cold wallets are indeed a good choice for long-term self-custody of assets, but they require more effort to understand and manage. Choosing the right cold wallet product for yourself, combined with proper usage habits, will basically allow you to hold your assets with peace of mind.