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Cold Storage

Cold storage refers to storing cryptocurrencies offline, disconnected from the internet, to prevent unauthorized access.

Cold storage, also known as a cold wallet, refers to any cryptocurrency storage device or method that is completely offline. It is used as a means of securing cryptocurrencies from potential online threats such as hacking and theft. Cold storage can involve keeping cryptocurrencies on a physical device like a hardware wallet, a paper wallet, or even a metal token. Since these devices are not connected to the internet, they cannot be remotely accessed or controlled, which adds an extra layer of security. For large amounts of cryptocurrencies, using cold storage is often considered a best practice. For accounting purposes, it's important to track the amount and value of cryptocurrencies stored in cold storage for accurate financial reporting.


  • Example 1: A Bitcoin investor stores their Bitcoin on a hardware wallet like a Trezor or Ledger, which is kept offline when not in use.
  • Example 2: A company involved in cryptocurrency trading keeps the majority of its assets in cold storage, transferring funds to a hot wallet only as needed for trading.


Blockchain and Technology
Crypto Accounting
Crypto Basics
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