Bitcoin: How to create a cold storage

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What is cold storage? In the world of Bitcoin, cold storage is nothing more than a wallet where your private key is offline. Ideally, this private key was generated by some offline procedure and has never been used.

These are some frequently asked questions regarding this type of wallet:

  • For what?

To provide greater security for some of our bitcoins

  • How many bitcoins should I have in this wallet?

This purpose of this wallet is similar to that of a safe or chest. The amount depends on each person, but we should store in this wallet, bitcoins which are not to be transacted daily, that is, we do not want to use regularly. The analogy is comparable to what we already do with fiat money. We don’t keep all of our money in the wallet that we carry in our pocket, since if we did and then we lose it (or it is stolen), we would lose all of our money. This is why we generally choose to carry a small amount of money on a regular basis and the rest we keep in a safe place. The same thing can be done with bitcoin. It is not sensible to store everything in a single wallet, and it makes more sense to have one wallet (or several) to transact and another (or several others) to store most of our funds.

  • I have my bitcoins in an online exchange, is it the same?

No, when we have our bitcoins in an exchange we do not own the keys to our wallet. This is why we are at the mercy of the exchange being ethical and honestly handling our funds. If something happens to the exchange (a hack, site shutdown, etc.), we run the risk of losing all our bitcoins.

  • Once I have transferred funds from my cold storage to another wallet, should I create a new cold storage?

Not necessarily, although it is safer to have a cold storage whose privates keys have never been used

  • Should I also keep my public key in a safe place?

Not at all! The only thing we must protect tooth and nail is our private key.

  • And where do I keep my private key to keep it safe?

Wherever we can trust, be it printed on paper, encrypted inside a pendrive, stored in a safe, or even a mixture of these.

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