If you hold a lot of cryptocurrencies, its best to store them offline in single or multisig wallet. It is important to know how to setup the wallet correctly and securely.
What is a cold wallet?
A cold wallet is simply an offline wallet with its private keys not accessible by anyone digitally. All transactions have to be executed manually. On the contrary, a hot wallet is a wallet with its private keys stored online so that transactions can be executed automatically.
Why do you need a cold wallet?
The private key is all that is needed to send a cryptocurrency to someone else. Keeping it online is handy but it also opens the door for hackers to steal it. Most hackers target cryptocurrency exchanges hot wallets. The risk is greatly reduced if the cryptocurrencies are kept in cold wallets.
Why do you need a multisig wallet?
A multisig wallet is a wallet whereby you need several owners to unlock it before a funds can be send out from it. This is very important because the single key holder cannot run with all funds in the wallet. A cold or hot wallet can have multisig capability.
How do you set up your own cold wallet?
At Whale Tech, we can onboard individuals or companies to create their own cold wallets. This includes:
- Software installation
- Hardware wallet setup
- Secure backup of mnemonic phrases
- Multisig wallet setup
- Recovery procedures
- Testnet testing