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What is a Cold Wallet?

A secure method for storing your cryptocurrencies in which you have full control is using a hardware wallet (cold wallet), a device that keeps your private keys safe offline.

Unlike software wallets (hot wallet), hardware wallets (private/cold wallet) store private keys on an external USB device (or similar). They are also able to perform online payments or direct cryptocurrency transfers to the Blockchain network. These wallets are designed to make transactions easy and convenient, while at the same time very secure; all you have to do is connect it to any online device, log in to the hardware wallet (cold wallet), send the coins, and confirm the cryptocurrency transaction.

In simple terms, a hardware wallet (private) is a digital equivalent of a bank account that allows you to store, send and receive cryptocurrencies.

Hardware wallets (cold wallets) have two important components: a public key and a private key. The public key is an address of the wallet that anyone can see and use to send you coins. The private key is both a method of authentication and a password used to access the stored cryptocurrencies in the wallet.

Also, wallets do not store cryptocurrencies in a physical form. When someone sends you cryptocurrency, what happens is that the ownership of those coins is transferred from the sender to the recipient. The transaction is confirmed by a registration on the blockchain and a change in the balance of the two wallets.

Hardware wallets (cold wallets) use a two-factor authentication (2FA) method. This means that in order to access the funds, you need to validate your identity through something you possess (the physical wallet) and something you know (the wallet's PIN code, complex password, or other authentication method).

Coin transfer is done the same as any other digital coin transaction, using an online wallet you have, scanning the QR code of the hardware wallet (cold wallet) or copying the address and sending the funds to it.

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