#小白必知
What is a cold wallet? 🎁💰
We often hear that it is not safe to store coins in on-chain wallets, and we are also worried about placing them in exchanges. The advanced point is that cold wallets are safe, so what is a cold wallet?
A cold wallet is a cryptocurrency wallet that allows you to store currency without an internet connection. Cold wallets generally provide a high level of security for users' crypto assets, protecting them from the risk of hackers and exploits.
How cold wallets work
Many people mistakenly believe that wallets (cold wallets and hot wallets) are where users deposit and store cryptocurrency assets.
However, it is important to understand:
All crypto assets are stored on the blockchain network.
The wallet only stores a pair of keys: a public key (representing the user's address on the blockchain) and a private key.
The only way to access crypto assets is through the private key corresponding to the public key.
The private key allows users to authorize and sign transactions from addresses on the blockchain.
The main function of a cold wallet is to manage and protect users' private keys in an offline environment. Therefore, it cannot interact directly with decentralized applications (dApps) and is suitable for long-term asset holding.
When a transaction is needed, the user must transfer the required amount from the cold wallet to the hot wallet, which then processes the transaction and connects with various dApps over the Internet.
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