Are cold wallets suitable for novice users?

Cold wallets, offline and inaccessible to the internet, prioritize security by storing private keys on devices like offline computers. While offering high security against hacking, they pose physical risks like loss or damage.

Feb 28, 2025 at 02:39 pm

• Types of cold wallets

• Hardware wallet : This is a common cold wallet form, similar to USB drives, such as Ledger Nano S, TREZOR Bitcoin wallet, etc. It stores the private key in hardware and needs to be connected to a computer or mobile phone for operation during transactions. It is highly secure and supports multiple cryptocurrencies, making it suitable for users with diversified investment portfolios.

• Paper wallet : Print the wallet address and private key on paper, which is low cost. However, when storing, you need to pay attention to waterproof, fireproof and loss prevention, and usually only supports one cryptocurrency, and the deposit and withdrawal process is more cumbersome.

• Other cold wallets : There are also sound wallets that use voiceprint encryption to store private keys, but applications have not yet been popular; deep cold storage stores assets in a completely isolated network environment, which is extremely secure and is mostly used by financial institutions, and is rarely involved by ordinary users.

• Advantages of cold wallets

• High security : Because private keys are stored offline and not connected to the network, it greatly reduces the risks of hackers, malware intrusion and phishing. Even if the connected device is infected with a virus or is hacked, the assets in the cold wallet will not be affected.

• Long-term storage security : suitable for users who hold large amounts of cryptocurrencies for a long time. As long as you properly keep the cold wallet equipment, you can ensure the security of your assets for a long time without worrying about network security issues.

• Asset isolation : It can isolate assets from the online environment, reduce asset risks caused by online activities, and help users better manage asset risks.

• Disadvantages of cold wallets

• Complex operation : For beginners, the process of creating and using cold wallets is relatively complicated. For example, creating a hardware wallet requires multiple steps such as purchasing a device, activating, setting a password, and backing up mnemonics. An error in any link may lead to problems.

• Inconvenient transactions : When conducting transactions, you need to connect the device, enter a password, confirm the transaction, etc. Compared with hot wallets, there are more operation steps and take longer time, which is not suitable for frequent transactions.

• Physical risk : Cold wallet devices may face the risk of loss or damage. If the private key or mnemonic is not properly backed up, the assets may not be retrieved if there is a problem with the device.

• Suggestions for beginners to use cold wallets

• Learn basic knowledge : Before using cold wallets, novices should fully learn basic knowledge such as cryptocurrency, wallets, private keys, mnemonics, etc., and understand the working principle and operation process of cold wallets.

• Choose the right type : Choose a cold wallet according to your own situation. If you pursue convenient operation and certain security, you can consider a hardware wallet; if the assets are small and there is no frequent transaction, a paper wallet is also an option.

• Pay attention to backup : Be sure to pay attention to the backup of private keys and mnemonics. You can copy multiple copies and store them in different safe places to avoid loss of assets due to loss or damage.

• Careful operation : Whether it is creating a wallet, backing up information, or conducting transactions, you must be cautious in the operation process, carefully check the information to prevent misoperation.