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What is a Cold Wallet?
A secure method by which I can store your cryptocurrencies and have control over them is by using a hardware wallet (cold wallet), is a device that keeps your private keys safe offline.
Unlike hot wallets, hardware wallets (private / cold wallet) store private keys on an external USB (or other) device. They are also able to make online payments or cryptocurrency transfers directly to the Blockchain network. They are designed to make transactions easy and convenient, and at the same time very secure; all you have to do is connect it to any online device, log in to your hardware wallet, send coins, and confirm a cryptocurrency transaction.
In simple terms, a (private) hardware wallet is a digital equivalent of a bank account that allows you to deposit, send and receive cryptocurrencies. Hardware wallets (cold wallet) have two important components: a public key and a private key. The public key is a wallet address that anyone can see and use to send you coins. The private key is both an authentication method and a password used to access the cryptocurrencies stored in the wallet, known only by you.
Also, wallets do not store cryptocurrencies in a physical form. When someone sends you cryptocurrencies, what happens is the change of ownership of those coins from the sender to the recipient. The transaction is confirmed by a blockchain registration and a change in the value of the balances of the two wallets.
Hardware wallets (cold wallet) use a form of two-factor authentication (2FA). This means that in order to access the funds, you must validate your identity with something you own (physical wallet) and something you know (wallet PIN code, complex password, or other way of authentication).
The money transfer is done in the same way as in any other digital currency transaction, using a wallet that you have online, scan the QR code of the hardware wallet (cold wallet) or copy the address and send the funds to it.
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