A Beginner’s Guide to Cold Crypto Wallets: How to Secure Crypto Assets

Crypto was born online and is vulnerable to cyber threats. You can sleep tight knowing your cash is under the mattress, but how to secure your cryptocurrency? How can you ensure your coins don’t get snatched from your laptop while you’re asleep?

This is where cold crypto wallets, aka hardware wallets, step in. They stand as a top pick among ‘serious’ crypto users and long-term investors. Even large, regulated exchanges pride themselves on using cold storage, as that means extra assurance for their users. Cold wallets offer a range of features and security boosts, but they also have their own drawbacks. In this article, we’ll cover a bit of each, so you’ll walk away knowing whether or not a cold crypto wallet is for you.

What Are Cold Crypto Wallets?

Hot crypto wallets – think MetaMask, Trust, Exodus, Phantom, etc. – function entirely online as separate apps and/or browser extensions. They need to be constantly connected to the Internet to process transactions and keep their balances updated. Your hot wallet lives and breathes even when you’re not using it. It’s a good fit for quick, daily send-and-receive operations and also great for navigating the world of DApps (Decentralized Apps). However, the obvious Achilles’ heel of hot wallets is their virtual nature. Like any software, they can fall prey to hacks and exploits and be tricked into spilling your crypto when you least expect it.

To sum up, hot wallets offer ease and convenience, but the security may not resonate with the more serious holders.

Cold crypto wallets are a different beast, as they store your crypto and private keys entirely offline, making them unreachable for malicious actors. Hardware wallets come as USD dongles – just like your flash drive, but for storing digital cash. You can plug them into your PC or connect to your phone (if supported) and manage your funds just like you would manage files. Cold wallets only go online when they’re allowed to, and sure enough, they’re not reachable once unplugged. This makes them a top pick for large holders, long-term investors, and the most safety-conscious crypto connoisseurs.

With that in mind, cold wallets have a serious drawback, especially for frequent short-term traders and those who transact small amounts. The user experience of hardware storage is anything but swift. Plugging in the dongle, accessing the storage, and making transactions take much longer than it does on a software wallet. But, while the device is unplugged, it can’t possibly be hacked or tampered with – unless it physically gets into someone’s hands. So, while they may be suboptimal for intraday traders, they’re often a no-brainer for long-term investors concerned with security.

And let’s not forget that a hardware wallet is, well, hardware. Should it get lost or damaged, you’re looking at losing your cryptos for good and beyond retrieval. So, with their extra security comes extra responsibility. Your crypto savings are now locked in a physical shell that needs to be treated with care – just like your physical cash would.

Top Cold Crypto Wallets: Features, Pros, and Cons

Ledger Nano Series (Ledger Nano S, Nano X)

The Ledger Nano S and Nano X are the number-one picks among cold wallets these days. They’ve been around for a while and have earned themselves a go-to cold storage rep. Ledger supports just under 2,000 cryptocurrencies, so your offline portfolio is bound to be diverse.

The differences between X and S lie in details. Thinks of the letters S and X as meaning “Small” and “Extra.” The S is a basic cold storage fit for basic use. The X has more of everything – storage, screen size, and also has a built-in battery, which the S doesn’t. The X also supports Bluetooth and connects to iOS devices, neither of which can be said about the S.

The Nano X comes at around $149, while the Nano S caters to budget needs, priced at about $59.

Trezor (Trezor One, Trezor Model T)

Second among the go-to cold wallets for crypto is the Trezor wallet. Trezor also comes as two instances – model One and model T – each differing in its set of features and target audience.

Trezor One is the basic model, while the T brings in a few bells and whistles. The One is controlled with two buttons and has a monochrome screen, while the T has a large, colored touchscreen for advanced setups and ease of navigation. Also, the T boasts an advanced backup system called Shamir, which allows users to fork their backup into separate parts. The One, on the other hand, only has a basic recovery seed protection. However, both versions support passphrases and multisigs.

What’s notable is that both Trezor One and Trezor T support Bluetooth, so you can control each with a gadget. Model One has somewhat simpler bluetooth compatibility, though.

Trezor one is priced at around $59, while the T model will set you back $149, making the pricing identical to that of the Ledger. The functionality fork is also the same: the cheaper option will let you handle the basics, while the costlier T will cater to more advanced needs.

Coldcard

Coldcard is a Bitcoin-only cold crypto wallet that’s hellbent on keeping your bitcoins safe. Like the Ellipal Titan, it’s completely air-gapped signing, meaning it never touches a computer directly. The rugged design and physical keypad are clearly built for function, not style. It supports MicroSD cards for backups as well as NFC connection, and even has a “Brick Me PIN”, basically a self-destruction mechanism.

The setup leans towards the complex side and will pose a learning curve for the newcomer. The price of Coldcard corresponds to its hardcore nature, with the base MK4 model priced at around $150 and the more advanced Coldcard Q coming at $220 as of this writing. So, consider Coldcard a tool for users who know their way around.

KeepKey

KeepKey is another kid on the crypto cold wallet block who’s already made a good name for himself. Covering over 7,000 coins and tokens, it certainly won’t leave diversification hounds disappointed. It sports a large display and has its own DApp Store. A nice bonus for active traders is the direct integration with the ShapeShift DApp, allowing users to trade 10,000+ cryptos without handing over their private keys. This is a great feature for users who want to swap cryptos and want 0% data disclosure.

The major drawbacks so far are the lack of Bluetooth and iOS support. So, Apple users who manage their cryptos remotely will have to figure out how to secure crypto assets elsewhere, at least for the time being.

Another notable feature is its serious, bulky case – it takes up quite a bit of space in your pocket and will mostly fit those who definitely don’t want their wallet to get lost.

KeepKey is priced at around $79, overall making it a decent offering.

More Standout Cold Wallets For Crypto

And now, let’s dive into some of the more exotic players in the cold wallet game. These options might not have the big-name recognition of Ledger or Trezor, but they bring their own unique twists to the table – ideal for those looking to explore beyond the usual suspects.

BitBox02

BitBox02 is a slick, compact crypto cold wallet from Switzerland that keeps things simple while doubling down on security. It’s perfect for newcomers who want solid protection without getting bogged down in complexity. Like other major hardware wallet players, BitBox02 offers two versions: one supports all listed coins without limits, while the other one – “for the purists” – only works with Bitcoin.

Navigation is done with touch sensors for navigation, while the connection is done with USB-C. Like the Trezor wallet, BitBox02 keeps its software open-source. This means it’s constantly reviewed and enhanced by the community.

Ellipal Titan

Ellipal Titan is dubbed Titan for a reason, as it offers a likely unmatched level of protection on all fronts. Let’s start with the fact that it never goes online and doesn’t support Bluetooth… or even a USB connection. So, it’s essentially immune to any form of attack. But how does it send and receive cryptos, you may ask? Well, that’s done with a QR code that is scanned upon each transaction with the wallet’s own app. And hey, have you ever wanted to store your cryptos in a tank? Ellipal Titan has got you covered. It boasts a solid, tamper-proof, sealed metal body. So, it can withstand the kind of wear and tear that would potentially destroy its nearest rivals.

You may call Ellipal the hardware wallet of hardware wallets. It’s tamper-poof but slow to use due to the constant scanning of QR codes. So, users after a plug-and-play experience might find it a bit clunky. Also, its sheer size knocks it out of the pocket-friendly league, wherein the Ledger Nano reigns supreme. Still, for those prioritizing a no-compromise approach to security, Ellipal Titan definitely delivers.

SafePal S1

SafePal S1 offers a fresh take on cold storage that’s easy on the wallet and tough on security. Its main schtick is that it’s completely offline, using QR codes for any transactions.

As a true safety samurai, SafePal S1 commits literal suicide when it decects tampering – all data about your holdings is erased, adding an extra safety net. This is a nice bonus for users worried about how to secure crypto assets in more… stressful environments. While the QR code system might slow you down a bit compared to more traditional setups, it’s a solid trade-off for the added security.

With Security, Comes Responsibility

So, let’s sum up. Cold crypto wallets offer an unparalleled level of security, as they take your cryptos offline, away from the prying eyes. But with that security comes responsibility. Just like a wallet for cash, if a cold wallet gets damaged or lost, you may find yourself in trouble. Many of the cold wallets you meet are tamper proof and can even self-destruct when under pressure. But most of them also come with a learning curve. You’ll have to keep them updated, make regular backups, and preferably know the ins and outs of the encryption methods used by the device. So, while offering unmatched security, cold wallets are definitely not plug-and-play. The target audience is safety-conscious long-term holders operating large sums you wouldn’t constantly take in and out. For active traders, cold wallets aren’t that great, as all operations take much longer than they would in software. So, before considering buying yourself a cold wallet, make sure to weigh up your needs and style to make sure your wallet doesn’t just waste that precious space in your pocket.