Offline Storage

Understanding Offline Storage

Offline storage, also known as cold storage, involves storing the private keys and funds of an account in a device that is not constantly connected to the internet. The purpose of this practice is to prevent unauthorized access and potential theft or misuse of user funds. By keeping the device offline, it becomes extremely difficult for attackers to gain access to sensitive financial information.

In contrast, online storage refers to the storage of data on devices that are constantly connected to the internet. Despite the implementation of encryption and other security measures, there is still a risk of bad actors bypassing or breaking these measures and gaining access to the private keys of online storage. This is because online devices are vulnerable to attacks at any time.

On the other hand, offline storage devices briefly come online only when a transaction needs to be sent to the network. Once the transaction is completed, these devices go offline again. Even if a cyber thief manages to access a transaction during this short time window, they would not be able to view the private key used for it. This makes it incredibly challenging, if not nearly impossible, to attack the device.

Common examples of offline storage devices include hardware wallets like Ledger, Trezor, and KeepKey, as well as physical storage mediums such as CDs, USBs, and offline computers.