Cold storage ethereum refers to ether (or the private keys for those funds) that is stored offline.
Ethereum, ERC-20 tokens and other altcoins are more popular than ever, but that popularity has also garnered the attention of hackers.
Unfortunately, cryptocurrencies like ethereum cannot be stored in a traditional bank, so owners of ethereum do not benefit from the safety and insurance that a bank provides.
This means that the owner of ethereum is solely responsible for protecting their own digital funds. This is where cold storage ethereum comes in.
Storing your ethereum offline keeps it safely outside of the reach of hackers. Cold storage options include:
- USB drive
- Paper wallet or QR code
- Physical wallet
- Hardware wallet
A common concern for someone using a USB drive, paper wallet, QR code, physical wallet or sound wallet is that if any of these items fall into the wrong hands, the private keys are extremely vulnerable.
Because of this, many people who use cold storage methods like a paper wallet or USB drive store that device in a safe deposit box for added security. However, doing so makes it more difficult for them to access the ether when they need it.
A hardware wallet, on the other hand, is widely considered the safest form of ethereum cold storage, and provides ease of use as well.
What is an Ethereum Hardware Wallet?
A hardware wallet stores your digital funds’ private keys in an offline hardware device that you can connect to a computer or smartphone to make transactions.
As cryptocurrencies like Ethereum and Bitcoin have become more common, hardware wallets have become popular as safe, functional, and easily accessible cold storage solutions.
Ether that is stored in a hardware wallet is protected even if the computer you are using falls victim to a hacker or a virus.
The private keys stored on a hardware wallet also can’t be transferred in plaintext, protecting you from malware.
Because hardware wallets require a PIN code to access, it is difficult for a thief to access funds from it even if they steal the device.
ERC20 tokens can also be stored on a hardware wallet, but must be accessed via a software wallet such as myetherwallet.com.
While there are, in theory, ways that a hardware wallet could be compromised (a bug in the firmware or software, a corrupt shipping process or production/assembly system), at the time of this writing, there is no record of a theft from a hardware wallet. Because of this, hardware wallets are commonly accepted as the safest means of cold storage ethereum.
Meanwhile, with easy connectivity via smartphones and computers, hardware wallets provide easy access to your funds when you need them. Hardware wallets seamlessly blends security and protection with ease of use and accessibility.
Let’s take a look at some of the best ethereum hardware wallets on the market.
Ethereum Wallet Cold Storage
A cold wallet provides the most secure option for storing cryptocurrency that still provides you easy, frequent access. Some wallets only allow storage of a few cryptocurrencies, but a select few can store a plethora. If you need to learn how to cold store Ethereum, read on for a short primer on what to look for in Ethereum wallet cold storage.
A high-quality cold hardware wallet provides both security and simplicity. It will have the following features:
- private keys and private key controls,
- an easy to use user interface,
- an active development community,
- a backup system and restoration capabilities,
- multiple operating systems compatibility.
The Top Ethereum Cold Storage
- Trezor: Pronounced like the American English word “treasure,” this hardware wallet served Bitcoin first, but added Ether to the cryptocurrencies it serves. It store the token data offline on its internal secure electronic chip. The chip only activates when you sign in with your password. You can connect it to the hot storage MyEtherWallet (MEW) website to move Ether after purchasing or trading it. This portable USB device comes in black, gray and white. It starts at $99.
Ledger Nano S:
- Ledger Nano S: It’s not just for Ether, you can store numerous cryptocurrencies offline in the Ledger. The device signs any Ether expenditure you make with a private key stored on the device. It features an OLED screen for viewing and controlling transactions. It offers some of the strongest security available. It starts at $99.
- KeepKey: The KeepKey combines the features of Trezor and Ledger Nano S to store cryptocurrencies, including Ether. It offers a larger screen though and weighs a bit more. Its plastic casing can chip easily if dropped. It lets you securely store tokens offline. It starts at $129.
- Ledger Blue: The Blue provides a large screen compared to other hardware devices. About the size of a cell phone, the front face is all screen. It’s made by the same company as the Nano S and features the same high-quality security measures. You must enter a PIN to use it. It supports Ether and 23 other cryptocurrencies. It offers a backup, so if you lose your device or it’s stolen, you can recover your account and tokens by providing your confidential recovery phrase. It starts at $269.99.
- YubiKey Neo: The Neo is an USB hardware device that supports multiple cryptocurrencies. It uses strict security measures and also serves as a password and login manager. It starts at $77.
Paper: The Other Cold Storage
Most people into cryptocurrency, blockchain platforms and smart contracts like high-tech. One of the safest methods of Ethereum cold storage is good, old-fashioned paper. Yes, really. You simply print out a copy of the private keys and public keys with your purchase information. It’s best to store these in a safe or safety deposit box.
You can use an application called ETHAdress to create a paper wallet. It lets you add an extra measure of security by encrypting the private keys before printing. It doesn’t require much set up time, but don’t lose the paper wallet. Unlike the high-tech versions, there is no backup.
Ethereum Cold Storage Wallets Keep Your Investment Safer
Since all forms of cold wallets keep your cryptocurrency stored offline, they keep it safer. Although it might seem tempting to use a desktop or Web wallet, these don’t offer the same level of security. So, while Exodus might seem great since it stores nearly one hundred cryptocurrencies, keep in mind that with it and most other desktop wallets, you need to remain connected to the Internet while using it. With hardware and paper wallets, you’re able to store offline. You can also access your information while offline. Now that you know how to cold store Ethereum, you only need to buy a wallet and some Ether to get started.
Ledger Nano S
The Ledger Nano S is our top pick for ethereum cold storage wallets. It weighs just 16.2g and measures 98mm x 18mm x 9mm when fully open (60mm x 18mm x 9mm when closed). It looks like a thumb drive and at a price point of €79.
Comprised of stainless steel and plastic, the Ledger Nano S features a sleek, efficient design. Two buttons located on the side of the device allow you to confirm transactions easily while enjoying the protection of physical transaction verification. The Ledger Nano S keeps your ethereum safe without sacrificing style.
In addition to ethereum, the Ledger Nano S can store bitcoin, litecoin and other altcoins. It is compatible with GPG, SSH, FIDO®, U2F and more. The Ledger Nano S was built on dual chip architecture (ST31/STM32, Certification level: CC EAL5+), so its firmware is guaranteed through cryptographic attestation.
As Ethereum, Bitcoin and other new cryptocurrencies continue to gain popularity, the risk of theft from hacking continues to grow. With no banks to protect your digital currency, it is important for each owner to secure their funds from potential threats, as well as have a way to easily access their digital funds.
Luckily, hardware wallets for cold storage Ethereum and ERC-20 tokens allow you to have your cake and eat it too. You can have secure cold storage ether funds you can access effortlessly and efficiently.
The Ledger Nano S is a great Ethereum hardware wallet that can keep your ether safe and offer unique convenience and accessibility options. For this reason, many cryptocurrency users actually utilize more than one of these cold storage hardware wallets.