What is Cold Storage?

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Updated: July 7, 2014

Cold Storage is storing your bitcoins offline. There are several ways to do this. The reason that you want to do this is because as long as your bitcoins are online or on a computer that is connected to the internet then they are not safe. You need to protect your coins by storing them offline. You do not need to store all of your bitcoins offline but it is a good idea to store any that you are not using in the short term in “Cold Storage”.  Here are a few example and common terms that are used. The main thing that you need to remember is cold=offline hot=online

cold storage hot wallet

COLD                                     HOT

 OFFLINE                              ONLINE

  “COLD” Storage                          “HOT” Storage

         Cold Wallet                        Hot Wallet

                      Paper Wallet                     Account at Exchange

                          Cold Device                   Wallet on your computer

Ok lets set up some basic cold storage.

Head over to https://github.com/pointbiz/bitaddress.org

and download the .zip file to your computer. The download link is on the right side of the webpage.

paper1

Now you will have a .html file that you have unziped.

—FOR BEST SECURITY USE A COMPUTER THAT NEVER EVER CONNECTS TO THE INTERNET —-

1. DISCONNECT FROM THE INTERNET: unplug the cable, disconnect from wifi
2. Open the .html file that you unziped, it will open in your web browser
3. Go to “Paper Wallet” as seen in the picture below.
paper2

4. Press Print

5. Close the browser

6. Connect to internet

7. Send a small ammount of bitcoin to the “load and verifiy” address (scan the QR code or manualy type in the address

paper3

Now the bitcoin that you just sent is in “Cold Storage”. The private key (the one on the right side) was NEVER online.  Store this paper wallet in a safe place. If you want to use the bitcoin that you sent then you need to “inport” your private key. You can do so by scanning your private key (the QR code named “Spend”) or typing in the long private key printed on the paper wallet. First try this out a few times before sending a lot of bitcoin to one paper wallet. Make several paper wallets and from time to time import them and make a new paper wallet.

Your coins are a lot safer than being on an exchange, on an online wallet, or even on your computer that connects to the internet.