How To Use a Cold Wallet

A cold wallet is a fully offline way to store Bitcoin and other crypto.

This means that it’s not connected to the internet and is immune to hacking, phishing attacks, and malware.

Unlike hot wallets or custodial exchanges, where you don’t control your private keys, a true crypto cold wallet guarantees that only you have access to your crypto.

As leading experts in crypto security and cold storage solutions, we are dedicated to helping you protect your Bitcoin from cyber threats.

In this step-by-step guide, we’ll cover everything you need to know about how to use a cold wallet, including how cold wallets work and why they are the safest option for storing your crypto.

Even if you’re a beginner to Bitcoin, by the end of this guide, you’ll have a solid understanding of cold storage wallets and how to protect your cryptocurrency properly.

What Is a Cold Wallet?

A cold wallet is a cryptocurrency wallet that stores your private keys offline.

As it’s not connected to the internet, it is immune to cyber-attacks and threats.

There are multiple categories of crypto cold wallets, that can either increase or reduce the possibility of hacking.

Quickly explained, there are two essential variations that you need to know about: Electronic cold wallets and Non-Electronic cold wallets.

Then, within these two categories, there are a variety of cold wallet types which we’ll explain further in this guide.

Cold wallets are not just an option for crypto security, but rather a necessity.

If you are holding a large amount of cryptocurrency, it is even more crucial for you to move your digital assets directly to a cold wallet.

With the growing threat of cyber attacks, making sure that your private keys are stored securely offline is the only way to guarantee full control over your digital assets.

Trusted Cold Wallets

If you’re serious about securing your Crypto, here are some of the best cold wallet options available:

1️⃣ Material Bitcoin: The simplest and most secure Bitcoin-only cold wallet with no electronic components to hack. Also available for Ethereum and Tether.
2️⃣ Ledger Nano X: A Bluetooth-enabled hardware wallet that supports multiple cryptocurrencies.
3️⃣ Arculus: An air-gapped wallet with three-factor authentication.
4️⃣ Tangem Wallet: A smart card-based cold wallet. Great for multiple users.
5️⃣ Ellipal Titan: A fully air-gapped, tamper-proof hardware wallet with a large touch screen.

Each of these wallets provides a unique user expereince, catering to different crypto storage needs.

For further information about each wallet, make sure to check out our extended reviews and guides on our blog.

Anatomy of a Cold Wallet

As we mentioned earlier, cold wallets come in different forms.

The two main categories are electronic and non-electronic, and within them, you will find hardware wallets (can be both), paper wallets, and metal backup wallets.

Each has its own advantages and specific uses.

Hardware Wallets

• Physical devices like Material Bitcoin, NGRAVE Zero, or Ledger store private keys offline.
• Can have an electronic component, like a screen or a metal cold card.

Paper Wallets

• Printed QR codes and private keys that require manual security to prevent damage or loss.
• Is more vulnerable to daily wear and tear.

Metal Backups

• Indestructible cold wallet backups for your seed phrase.
• Material DIY and Cryptosteel are popular examples used for safeguarding recovery phrases against fire, water, and physical damage.

For best practices, store your physical device in a safe place.

Make sure that no one knows where you are keeping it, and if you are using an electronic hardware wallet or paper wallet, store it in a fireproof and waterproof safe.

Remember to always use a metal backup in case your cold wallet is lost or stolen and finally, don’t ever share your private key with anyone!

How to Use a Cold Wallet for Your Crypto

There is no need to feel overwhelmed.

Follow these steps to set up and use a cold wallet securely.

1. Choose a Cold Wallet

• Select a reliable cold wallet based on your needs:
• Material Wallets are perfect for easy-to-use, air-gapped storage (non-electronic).
• Trezor Model T is an open-source wallet with a touchscreen interface (electronic).

2. Set Up and Secure Your Wallet

• Generate a private key and 24-word recovery seed phrase during setup.
• Secure your seed phrase and store it safely (never online).

3. Transfer Crypto to Your Cold Wallet

• Copy your cold wallet address from your device.
• Withdraw funds from an exchange (for example, Coinbase or Binance) using your wallet’s address.
• Verify the address and confirm the transaction.

4. Store Your Wallet Safely

• Keep your cold wallet in a fireproof safe and store the backup separately.
• Never share information about your crypto holdings.

5. Check Your Crypto Balance Securely

• Use a blockchain explorer to view your wallet balance.
• Enter your public address, never your private key!

How to Transact with a Cold Wallet (Example: Coinbase)

Using a cold wallet to store your crypto means that you’ll need to transfer funds from an exchange like Coinbase.

Here’s how you can send crypto from Coinbase to a Cold Wallet.

1️⃣Log into your Coinbase account.
2️⃣Go to the Send/Withdraw section.
3️⃣Enter your cold wallet address or scan the QR Code on the device.
4️⃣Double-check the address.
5️⃣Confirm the withdrawal and wait for network confirmations.

Need more details? Check out our step-by-step guide on how to withdraw from Coinbase.

Setting Up Your Cold Wallet

To set up your cold crypto wallet, you must pay careful attention.

First, unbox your wallet and verify its authenticity by checking that the packaging hasn’t been tampered with.

Then, during setup, your wallet will generate a 24-word recovery phrase.

Store this on a metal backup, and never keep it digitally.

Next, set up a strong PIN or password to prevent unauthorized access.

Before transferring large amounts, always test a small transaction to confirm everything works correctly.

Common Risks and Disadvantages of Cold Wallets

Although using a cold wallet gives top-level crypto security, there are certain risks you should be aware of.

Understanding these drawbacks can help you plan and manage your assets better.

➡️Physical Damage or Loss: Since cold wallets are physical devices, they can be lost, damaged, or even stolen if not stored securely. Always use a fireproof and waterproof safe to lower these risks.

➡️No Recovery Without Backup: If you lose your recovery seed phrase, you permanently lose access to your crypto. This is why using a metal backup like Material DIY is a must!

➡️Less Convenient for Frequent Transactions & Daily Traders: Cold wallets have a manual process for sending crypto, which can annoy frequent users. Cold wallets are best for storing large amounts of crypto for long-term hodl.

Why use a cold wallet? Because they are the best way to protect your cryptocurrency from online threats, phishing attacks, and exchange failures.

Why You Need to Use a Cold Wallet For Your Crypto Storage

Cold wallets are the best defense against hacks, phishing attacks, and exchange failures.

You have full control over your crypto, and with Material Bitcoin, you get simple, secure, and offline Bitcoin storage for top protection.

Don’t forget to subscribe to our newsletter and get a $10 coupon to start using Material Wallets today.