What is Cold Wallet?

 A cold wallet, as stated at the beginning of this section, is completely offline.  They are not as handy as hot wallets, but they are significantly more secure. A sheet of paper or an etched piece of metal are two examples of physical mediums used for cold storage. A cold wallet is an offline wallet that may be used to store cryptocurrency for lengthy periods of time.

Types of cold wallets include:

• Paper wallets
• Hardware wallets

Paper Wallets

Paper wallets are the safest way to store your coins. It is printed on paper, despite the fact that it involves a JavaScript website or offline software that is used to produce public and private keys. That is why it is referred to as a paper wallet. Because the private key cannot be retrieved if the paper wallet is lost, it should be kept in a secure location.

To ensure that the printer is completely safe, we should not connect it to the internet when printing. Because information is not saved online, we can be assured that it is the most secure form. Because you have total control over the private key, there is no possibility of a transaction. A physical location where the private and public keys are written down or printed is referred to as a paper wallet.

In many respects, this is safer than storing assets in a hot wallet since remote hackers cannot access these keys, which are protected from phishing assaults. On the other side, it raises the possibility of the piece of paper being damaged or lost, resulting in irrecoverable cash.

Advantages:

• Placed in the user's pocket or physical wallet without any computer connection

Disadvantages:

• The transaction takes longer to complete.

Hardware Wallets

Hardware wallets are devices that store cryptocurrency in hardware like as USB flash drives. Like storing data on a USB pen drive and utilizing it on the road by just plugging it in, hardware wallets allow you to carry your bitcoin offline and only use it online when necessary. To spend or withdraw cryptocurrency, you must go online, which a hardware wallet provides.

Simply insert the USB hardware wallet and begin spending your bitcoin.A hardware wallet is an external device that keeps your keys (often a USB or Bluetooth device). A transaction can only be signed by pressing a physical button on the device, which bad actors cannot manipulate.

Advantages:

• The most secure USB wallets have a screen on it
•  More secure than all other forms of wallets

Disadvantages:

•  Expensive to purchase
•  It is not suitable for beginners.

Best Practices:

• A transaction cannot be reversed 
• Before utilizing cryptocurrency wallets, consider the following points in mind.
• It is consistently suggested and strongly advised that you should not share or screenshot your seed word (typically a 12-word sequence).
• Setting up a multi-signature and multi-factor authentication system provides further security levels.
• Sharing the Private Key with anybody is strongly discouraged since you may lose all of your money and there is no way to reverse a transaction that has already occurred.
• To increase security, only keep as many cryptocurrencies as you trade in a week in hot wallets and the rest in cold wallets.
• You are solely responsible for the safety of your crypto wallet.
• Your cash will be lost if you submit your private key to a phishing site. 
• You will not be able to retrieve the lost private keys