◈ GLOSSARY · CRYPTO & WEB3
Cold Storage.
A definition, in plain English — with the books that teach it.
ClearValue Books · reviewed against sources ·
◈ DEFINITION
What it means
Definition
Keeping crypto private keys completely offline — typically on a dedicated hardware wallet, sometimes on a paper backup in a safe. The point is that keys that never touch an internet-connected computer can't be stolen by malware or a website hack. The honest caveat: cold storage protects against online theft but transfers risk to you — lose the device and the recovery phrase and the coins are gone forever; nobody can reset them.
◈ IN PRACTICE
Example
After the FTX collapse in late 2022, billions of dollars of customer crypto were stuck on the exchange. Customers who held the same coins in cold storage on a Ledger device weren't affected — their keys were never with FTX in the first place.
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