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1/ What is cold storage? 🥶
A thread 🧵
A thread 🧵
2/ "Cold storage" in the context of #cryptocurrencies refers to keeping a reserve of cryptocurrencies offline.
3/ This is a security measure used to prevent theft or loss due to cyber attacks, as it involves storing private keys, which are used to access and manage digital currencies, in a secure offline environment.
4/ This offline storage can be on a computer that is not connected to the internet or a physical copy of the private key. Different forms of cold storage include👇
5/ 🪪Hardware Wallets: Physical devices designed to securely store a user's private key offline. Immune to viruses that steal from software wallets, transactions are made by connecting the wallet to an internet-enabled device, sign the transactions offline & broadcast it online.
6/ 📄Paper Wallets: This form of cold storage involves printing out your private keys on a piece of paper, which is then stored in a secure location. Since the keys are not stored digitally, they cannot be hacked or stolen digitally.
7/ 🧲Metal Wallets: Similar to paper wallets but written on pieces of metal, these are resistant to damage from flooding or fires.
8/ Cryptocurrency Custody Solutions: Some financial institutions offer secure storage services for cryptocurrencies, holding the digital assets offline in vaults.
9/ It's important to note that while cold storage offers increased security for your cryptocurrency, it also comes with its own risks.
10/ For instance, if the device or piece of paper on which the private key is stored is lost, damaged, or destroyed, access to the cryptocurrency is lost forever. It's crucial to take all necessary precautions to protect and back up cold storage information.
11/ Follow @Coredao_Org and @CoreDAO_Academy for more educational posts and learn how to navigate in the blockchain world☀️
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