How to move crypto to Cold Storage?
Owning a software crypto wallet may seem like a breeze until a glitch or cyber assault drains your funds.
Cryptocurrency losses due to theft or technical mishaps are prevalent, resulting in billions lost annually to nefarious entities.
Thus, migrating your crypto assets to a cold storage wallet is a prudent move. But how exactly do you execute this transfer to ensure the safety of your digital wealth?
What Is a Cold Storage Wallet?
There are two main types of crypto wallets: cold storage (hardware) and hot storage (software). Cold means no internet, hot means online.
Hot wallets are common and free, like Exodus or Trust Wallet. But they’re risky due to internet connection, vulnerable to hacks.
Cold storage is safer. Hardware like Ledger or Trezor, or paper wallets, are isolated from the internet. Paper wallets are simple, just keys on paper, super secure, and cheaper than hardware.
To transfer crypto to a hardware or paper wallet, how?
How to Transfer Crypto to a Paper Wallet
To transfer crypto to a paper wallet, you first need to create a paper wallet.
Creating a paper wallet usually involves something called a private key generator. A popular online generator, BitAddress, can be used for free to generate a Bitcoin paper wallet.
Head to BitAddress and click Paper Wallet in the green menu bar. Here, you can select how many addresses you’d like to generate and add a BIP38 key. If you want to keep your private key extra safe, you can also add a BIP38 password to your paper wallet. This encrypts your private key and adds password protection to your wallet.
Before generating the wallet, tick the BIP38 option and type out your BIP38 password in the available text box. Make sure this is a strong and complex password with a mix of different characters and numbers. In the screenshot above, we’ve added a very simple password, as we’re creating a test paper wallet that will never be used.
After clicking Generate, your paper wallet QR codes will be displayed below. On the left will be your Bitcoin public address QR code, with the public address displayed in full up the right-hand side. On the right is your private key QR code, with the private key displayed along the left-hand side. Never share your private key with anyone.
When you print your paper wallet, make sure it is stored in a highly secure location, away from prying eyes or possible damage. Check out our guide on securely storing seed phrases to get some handy paper wallet storage ideas.
Transferring Crypto to Your Paper Wallet
Now, it’s time to add funds to your paper wallet. You’ll need your paper wallet’s full address (i.e., the public key) to do this. Type or paste the public address into the Send field in your crypto software wallet app, select the amount you’d like to transfer, and you’re good to go.
In the Exodus desktop app, the transfer process is as follows:
- First, open the Exodus app and click the Send option on the home screen.
- You’ll now be able to enter a wallet address. In the provided field, enter your paper wallet’s address and select how much Bitcoin you want to send.
So long as you’ve entered the correct address and your Exodus wallet has sufficient funds to make the transfer, all should go through smoothly.
Alternatively, you can click the small QR code logo on the right-hand side of the wallet address field. This will allow you to scan your paper wallet’s public address QR code (not the private key QR code). This will likely be easier on the smartphone app, where you can use your front camera to take a clear image.
This process may differ slightly from wallet to wallet, but it should still follow the same basic steps.
Read more: What is a Honeypot in crypto?
The Risks of Paper Wallets
Paper wallets may be cut off from the internet, but they still have a few risks and downsides.
Firstly, if you lose or damage your paper wallet, your private key will be lost forever. This means you’ll never be able to access your paper wallet funds again.
Secondly, if someone gets their hand on your paper wallet, they can immediately see your private key. Hardware wallets are often PIN-protected, so not just anyone can uncover your private key. The total lack of technology here brings a severe security risk.
You may want to laminate or make a copy of your paper wallet if you’re worried about these possibilities.
How to Transfer Crypto to a Hardware Wallet
If you don’t like the sound of software or paper wallets, a hardware wallet may be the best fit for you.
Instead of creating a hardware wallet, you’ll need to buy one. Ledger and Trezor are the leading hardware wallet providers, with devices like the Nano S and Model One taking the main stage for crypto lovers. Ledger’s wallets have great security features (such as its BOLOS software), but Trezor also offers some very solid protection.
However, if you find another brand you like and trust, there’s nothing wrong with venturing elsewhere.
The process of sending crypto to a hardware wallet will differ from provider to provider but often involves connecting your wallet to your PC via a USB cord and using the wallet’s dedicated software to make a transfer. Using the software, select the receiving crypto option, and a wallet address will be generated.
Use this address in your software wallet app when asked to provide a recipient address.
Cold Crypto Wallets Are the Safest Option
Whether holding a small or large cryptocurrency, it’s always wiser to use a cold storage wallet. Whether you opt for paper or hardware, you can rest easy knowing that cybercriminals aren’t using vulnerabilities or malware to access your precious funds.
And remember, when sending large sums of crypto to any wallet, complete a test transaction to make sure you’re using the correct address. Once that crypto is sent, there is no way to get it back if you send it to the wrong address.