What Are the Best Cold Storage Wallets and How They Secure Crypto?

Do you know how much crypto is stolen every year? In 2024, it was valued at $2.2 billion, that’s not a small sum. And not being careful enough means you could be one of those people, too. 

If you’re serious about keeping your crypto safe (and want to sleep better at night), cold storage crypto wallets are the way to go.

Curious to know more? Let’s explore. 

What Is Cold Storage? 

Cold storage means storing your crypto assets in a place that is not connected to the internet. Technically, it only contains your private keys and not the assets themselves. That means no hackers can get in and no sketchy phishing links whatsoever. 

Just you and your assets, safe and sound. 

How does it work?

With a cold wallet, you generate and store your private keys on a device that never goes online. It could be a simple hardware wallet or even a piece of paper. 

Now, when you need to make a transaction, you connect the device temporarily and then disconnect once you’re done. Because of the security it provides, 60% of long-term crypto holders now use cold wallets.

What Are the Main Types of Cold Storage Wallets?

Even though there are several options, not all of them are for everyone. So, before you go on and choose the wrong cold wallet, let’s take a look at the different possibilities: 

1. Hardware Wallets

Hardware wallets are one of the most popular and secure types of cold storage. These are small, physical devices (like USB drives) that store your private keys completely offline. They only connect to the internet when you plug them in. 

The best part is that you can easily carry them around as they usually only require a PIN to unlock. They also back up your keys with a recovery phrase. 

Some key benefits of using hardware wallets include: 

• Offline at all times: Keeps your private keys off the internet. 
• Encrypted & PIN protected: Adds layers of defense. 
• Easy backups: Recovery phrases let you restore your crypto wallet if it’s lost or damaged. 
• Portable & user-friendly: Just plug and play. 

2. Paper Wallets

Paper wallets are a classic form of cold storage. They’re literally pieces of paper that contain your private keys. But not just simple words, they’re printed as QR codes or alphanumeric text. 

You can easily generate them using an offline crypto wallet generator, print them out for safekeeping, and just keep them in your drawer. The best part? They cost nothing, and no one can digitally enter your home and steal them from your drawer. 

However, as it’s a piece of paper, people tend to misplace it. It’s also not a good option for people making regular transactions. 

3. Sound Wallets

You might have heard about the previous two, but not this one. Sound wallets are one of the coolest and weirdest forms of cold storage. They store your private keys encoded in audio files. Yes, actual sound. 

These files are either stored on vinyl records,digital audio formats like CDs, or flash drives. The most frustrating part is that you’d need a spectroscope or software to decode the sound and recover your private keys. That’s insane. 

It’s not mainstream yet, but some crypto security geeks are into it. It’s creative, unguessable, and very sci-fi.

4. Deep Cold Storage Solutions

If you’re looking for a Fort Knox level of security for your assets, then this is it. Deep cold storage means storing your private keys in physical locations that are completely inaccessible to networks. 

Most crypto institutions and exchanges use deep cold storage in secure bunkers, guarded and insured. For everyday users, this could mean putting your hardware wallet or paper backup in a bank deposit box. 

Almost 95% of user funds are kept in cold storage by exchanges now as they’re highly vulnerable to cyberattacks. This year, even Bybit was hacked, with$1.4 billion stolen in user funds. So, you know how vital these cold storage solutions are in this age. 

5. Offline Software Wallets as Cold Storage

This method involves using software crypto wallets (like Ethereum or Armory) that are installed on a device that never touches the internet. You simply generate your keys offline, sign transactions offline, and then broadcast them using a separate online device. 

How cool is that? Right? Even though it’s a bit technical, it’s super secure. 

It's a great option if you want something more flexible than paper but not as expensive as hardware wallets.

Which Cold Storage Wallets Are the Best Choices?

Many people struggle with finding a cold storage wallet that works for them. So, to help ease the headache, here are the best ones you can choose today. 

1. Ledger Nano X

Best for: On-the-go users who want mobile access and strong coin support. 

The Ledger Nano X is a sleek, Bluetooth-capable hardware wallet that works with iOS and Android via the Ledger Live app. It supports over 5,500 coins and tokens. This means whichever token you have, it can easily be stored in it. 

Just pair the device, confirm your actions, and you’re good to go. It’s that simple. You can find one for around $149 with free shipping options. The only drawback people found was that its battery isn’t replaceable and the Bluetooth can rarely but surely become a security risk. 

And let’s not forget the staking options. You can simply stake crypto like ETH, SOL, and ADA directly through the app. So, even when your tokens are sitting idle, they’re passively making money for you. 

2. Trezor Model T

Best for: Users wanting complete transparency with touchscreen control. 

Another widely used cold wallet is the Trezor Model T. It includes a 1.54” color touchscreen for easy navigation. There’s also a microSD slot for optional local PIN encryption and advanced recovery with Shamir Backup. 

If you’re looking for an open-source crypto wallet that is great for interacting with decentralized apps, this wallet is the best thus far. You can easily find one for $129 from official sources. The only problem is it’s pricier than its Model One, which only costs $49. 

3. KeepKey

Best for: Budget-conscious beginners seeking a user-friendly, low-cost entry. 

Cold storage doesn’t have to be pricey. And KeepKey does precisely that. It features a crisp touch display, straightforward setup, and integration with ShapeShift for easy trades. Just plug it in and use it right away. 

You can easily find one for only $39, which is often bundled as a budget option. The drawback is that it has limited coin support compared to the previous two options, and not so many advanced features. Just simple trading with security. 

4. Ledger Nano S Plus

Best for: Value seekers wanting full Ledger features without paying for Bluetooth. 

You don’t have to spend over a hundred dollars to get the features of a Ledger, as you can easily do that in only $79, without the Bluetooth option. It still offers the same support for 5,500 coins, but at a much more affordable price. 

All you need is a manual cable connection. For some, it’s a drawback, while for others it’s a benefit as the security risk that comes with Bluetooth is eliminated. 

5. Ellipal Titan 2.0

Best for: Security buffs who want a totally air-gapped operation and retro cool design. 

The Ellipal Titan 2.0 is completely offline. No USB, no Bluetooth, and no Wi-Fi. The only way to move data? Through SD cards or QR codes, sealed in a tamper-evident metal body. 

It supports over 10,000 tokens, which is much more than what Ledger provides. That’s why it costs more, too, at roughly $169. One drawback that people faced was slow update times, higher prices, and inconsistent support. 

For someone who needs a truly air-gapped crypto wallet, this one should be their go-to solution. Many people also love the magnetic lock that comes as an added physical security feature. 

6. Cypherock X

Best for: Users wanting advanced multi-factor crypto protection with cloud recovery

Cypherock X is a next-gen cold storage wallet that splits your private key across five parts in one hardware wallet and four NFC cards. This means even if someone steals your crypto wallet, they still can’t access your funds without the other cards. 

It’s relatively new compared to Ledger and Trezor, but is gaining popularity fast. You can find one for as low as $199 on their official site. However, if you prefer to have multiple tokens in your portfolio, this might not be the best option as it only offers limited token support. 

7. BitBox02

Best for: Open-source lovers and minimalists who want clean, private setups. 

BitBox02 is a compact USB-C hardware wallet that mainly focuses on privacy and simplicity. Unlike Bluetooth-enabled crypto wallets, it works only when plugged into your computer. That makes it less convenient for mobile use, but much safer. 

There are two versions: the Multi Edition for Bitcoin and altcoins, and the Bitcoin-only Edition for die-hard BTC purists. If you want the multi-version one, you’ll have to spend $129 for a smaller display than other cold wallets. 

How Can You Set Up and Use a Cold Wallet Safely?

Not tech-savvy? No problem. Let’s walk you through how to safely set up your cold storage wallet and share the best practices to keep your crypto protected. 

Step-by-Step Cold Wallet Setup Process 

Here’s a basic setup guide that works for most hardware crypto wallets like Ledger, Trezor, BitBox02, and others:

Step 1: Buy From an Official Source

Always buy your cold wallet directly from the manufacturer’s website or a certified partner. There are so many fraudulent websites out there that would try to sell for cheap and you’d end up getting a bar of soap instead. 

Step 2: Unbox and Verify Integrity

After receiving the package, open it and check that it’s in original condition and no one has tampered with it. 

Step 3: Complete the Device Setup

Now, connect the crypto wallet to your computer or smartphone. A few instructions will appear on the device, which you need to follow to complete the setup. It’ll also ask for a PIN for the device. Don’t forget that PIN or you won’t be able to access your device again. 

Step 4: Generate and Secure Your Recovery Phrase

The device will generate a 12 to 24 word seed phrase. This is the only way to recover your funds if the crypto wallet is lost or damaged. Just don’t store it digitally, as that would just contradict the entire purpose of having a cold wallet. 

Step 5: Add Crypto

You’re almost done now. Add crypto from an exchange or crypto wallet to the cold wallet’s address. Never send the entire amount the first time; test it with a small amount to make sure you’ve used the correct address and the transfer works. 

Best Practices for Maintaining Cold Wallet Security

Just owning a cold wallet isn’t enough. Appalling, right? You also need to protect it like a vault. Here’s how: 

1. Store Your Recovery Phrase Like Treasure

When you first set up your cold crypto wallet, you’ll receive a 12 to 24-word key phrase. It’s the only phrase that would let you into your device if it’s stolen or lost. So, write it down on paper or use a metal backup that’s fireproof and waterproof. Never save it on your phone, computer, or cloud. These are a digital haven for hackers.  

2. Never Share Your Seed Phrase

Never means never. This might sound obvious, but scammers are becoming way more clever now. They might pretend to be support agents or send fake emails, which is why many people still fall for it. 

Keep a simple rule: If someone asks for your seed phrase, it’s a scam. 

3. Keep Your Device Somewhere Safe and Dry

Your cold wallet is small, so it’s also easy to misplace. Always keep it in a locked drawer or any secure spot (but don’t forget about it). 

4. Do a Health Check Every Few Months

Don’t just set it and forget it. Every few months, plug in your cold wallet and ensure you can still access it. You don’t need to move funds, just make sure the PIN works and that everything is in place. 

5. Consider Using a Backup Drive

If you’re managing a large amount of crypto, consider buying a second cold wallet as a backup. You can use it to test recovery processes or simply as an emergency plan.

How Do Cold Wallets Compare to Hot Wallets?

Even though cold wallets are super secure, you cannot deny the usefulness of hot wallets. Here’s how they both stack up against each other: 

Conclusion

Crypto hacks are not stopping anytime soon. So, it’s time for us to be smarter than those hackers and more careful. By spending less than 50 bucks, you can get a cold wallet that keeps your prized possessions safe. 

In the end, it all comes down to what you choose. It can either be a hardware wallet like Ledger, a simple paper crypto wallet, or even store your keys in an offline device. The goal remains the same: to keep the assets safe. Cold wallets may take a little more effort to use, but the extra security is worth it.

Disclaimer: The content provided in this article is for educational and informational purposes only and should not be considered financial or investment advice. Interacting with blockchain, crypto assets, and Web3 applications involves risks, including the potential loss of funds. Venga encourages readers to conduct thorough research and understand the risks before engaging with any crypto assets or blockchain technologies. For more details, please refer to our terms of service.