Recently, more and more people around them are getting stuck on a question: how to properly manage their crypto assets? In particular, private keys and seed phrases—if they’re lost or stolen by accident, it’s over. That’s also why so many people are starting to pay attention to cold wallets.

In fact, the concept of a cold wallet isn’t complicated. Simply put, it means storing your crypto private keys on an offline device—typically hardware wallets, but also including paper wallets or USB wallets. Unlike hot wallets that need to connect to the internet, a cold wallet prevents hacker attacks through physical isolation, which is its biggest advantage.

A cold wallet works in two steps. First, it generates a pair of public and private keys. The public key is like your account address—it can be shared publicly to receive assets—while the private key is like a password, with authority to control everything in the wallet. Many people have also heard of seed phrases; actually, they’re another form of the private key, usually 12 or 24 English words, mainly for easier memorization. The second step is offline storage: the cold wallet isn’t connected to the internet, which effectively prevents various network attacks.

Now, cold wallets on the market come in all kinds. I looked at some of the more popular options. The Ledger Nano X is from Ledger in France. It supports more than 5,500 cryptocurrencies, has a security grade of CC EAL 5, and costs $149. There’s also Trezor Safe 5 from Czechia, with an even higher security grade of CC EAL 6+, supporting more than 1,000 coins, priced at $169. If you want a cheaper option, SafePal S1 Pro is roughly around $90, but it supports over 30,000 cryptocurrencies, which is definitely an advantage.

When choosing a cold wallet, you mainly need to consider several factors. Security is definitely the top priority—you need to make sure it has strong encryption and multi-factor verification mechanisms. Next is compatibility: you should confirm it supports the coins you hold. Then consider the cost: you don’t necessarily need to buy the most expensive one; what matters is value for money. Finally, consider the user experience—an easy-to-use interface makes it much easier to manage your assets. This information can usually be found on official websites, and you can also check reviews from other users.

As for how to use a cold wallet, the process is also not complicated. If you don’t have a public/private key pair yet, you can generate one directly on the cold wallet or hot wallet. When you need to make a transaction, connect the cold wallet to your phone or computer, and enter the PIN or password to unlock it. After you initiate the transaction, just verify and confirm on the device. Once the transaction is completed, disconnect it, and the private key returns to offline status. One more reminder: never casually connect your cold wallet to unknown DApps—otherwise, the cold wallet can be attacked just like a hot wallet. Also, although hardware wallets are resistant to drops and water, you still need to store them properly. Ideally, back up your private key or seed phrase using paper or a USB drive.

Cold wallets and hot wallets each have their pros and cons. Cold wallets store assets offline, offering high security but more cumbersome operation, and they usually cost between $50 and $500—suitable for holding long-term. Hot wallets store assets online, are convenient to use and free, but have relatively lower security—suitable for frequent trading.

Based on the data, the number of crypto wallet users is growing rapidly. In 2022, it already reached 80 million users, surpassing the total for all of 2021. The hardware wallet market is also expanding—from a $400 million scale in 2021, it is expected to continue growing. With competition intensifying, major developers are improving security, supporting more coins, and lowering prices, which is good news for users. If you’re also considering secure storage for your crypto assets, now is indeed a great time to learn about cold wallets.