What are the steps and precautions for using a cold wallet?

Cold wallets, like Ledger and Trezor hardware wallets or paper wallets, store cryptocurrency offline for enhanced security. Transactions require offline device signature verification, minimizing cyber threats.

Feb 28, 2025 at 02:29 pm

• Hardware wallets : such as Ledger Nano S, Trezor, etc., which look similar to a USB flash drive. They store cryptocurrencies in secure hardware devices and connect to computers during transactions, which is highly secure.

• Paper wallet : Print the private and public keys of cryptocurrencies on paper, store them in a secure place, record transactions on the blockchain, and keep the keys offline to prevent cyber attacks.

• Preparation : If you create a mobile phone cold wallet, you need to prepare two mobile phones. One is a cold wallet mobile phone that is never connected to the Internet and is specifically used for signatures; the other is used in the observer mode, which can view the wallet details and initiate the transfer operation, but all operations require the cold wallet mobile phone to be authorized through the QR code.

• Install wallet applications : On cold wallet devices (mobile phones or computers), choose safe and reliable wallet applications, such as TP (tokenpocket) wallet, imtoken, Ouyi web3 wallet, etc. Take TP Wallet as an example, search and download the app in the mobile app store.

• Create a cold wallet : Open the wallet app on the cold wallet device and click "Create Wallet". Select the public chain to create the wallet, such as Bitcoin, Ethereum, etc., and then select the "Create Cold Wallet" option. The system will generate a private key and must be saved properly. This is the key voucher for the asset. After clicking "Go to use", import the generated private key and set a high-strength password.

• Import Observer Wallet (if necessary) : Open the wallet application on another device for observation, click "Import Wallet", select the same public chain as the cold wallet, click "Observer Wallet", fill in the public key address of the cold wallet and import. Observer wallet can view wallet information, but cannot directly operate the private key.

• Deposit assets : generate the collection address of the cold wallet, and transfer the cryptocurrency to this address from other trading platforms or wallets. Carefully check the address during operation to avoid error transfer.

• Trading operation : When a transaction is required, a transfer operation is initiated on the observer's device to generate a transaction QR code. Scan the QR code with a cold wallet device to sign the transaction. A new QR code will be generated after the signature is completed. Then use the observer device to scan the new QR code and send the transaction information to the blockchain network for confirmation.

• Purchase channels : When purchasing cold wallet equipment such as hardware wallets, be sure to purchase from official or authorized formal channels to prevent the purchase of forged or tampered equipment. Carefully check product seal and packaging integrity.

• Private keys and mnemonics custody :

• Private key : Private keys are the core of digital assets. Once lost or leaked, assets will be at risk. Do not store private keys on networked devices, but can be printed on paper and stored in a waterproof, fire-proof and theft-proof security place.

• Mnemonic words : If a wallet generates mnemonic words, you should also attach great importance to them. Back up mnemonic words on multiple media, such as paper, metal plates, etc., and store them in multiple different physical locations. It cannot be stored in network environments such as email, cloud storage, instant messaging platforms.

• Password setting : When setting a cold wallet password, use a strong password, including letters, numbers, and special characters, with a sufficient length. Avoid using simple and easy-to-guess passwords, such as birthdays, continuous numbers, etc.

• Equipment security : Ensure the safety of devices that store cold wallets, such as mobile phones, computers, etc. Install antivirus software, regularly update the system and software, and prevent malware and viruses. Avoid using cold wallet devices in public network environments to prevent information from being stolen.

• Software Update : Regularly check and update the firmware of cold wallet applications and hardware wallets. Developers will fix security vulnerabilities, improve performance, and maintain the latest version to enhance security.

• Transaction confirmation : When conducting a transaction, carefully check the transaction information, including the collection address, transfer amount, etc. Any errors can lead to asset losses. Small test transactions can be conducted before sending large assets.

• Prevent phishing : Beware of phishing websites and phishing emails, do not click links of unknown origin, and avoid entering cold wallet-related information in untrusted websites or applications. If you receive suspicious notifications related to cold wallets, please contact the official wallet customer service directly to verify.

• Backup and restore : Regularly back up cold wallet information, including private keys, mnemonic words, etc. Test recovery can be performed to ensure that the backup is effective so as to prevent the asset from being restored when equipment is damaged or lost.