Definition: A cold wallet is a device or service that stores cryptocurrency completely offline and not connected to the internet. The main purpose of a cold wallet is to increase security and prevent hacker attacks and malware intrusions.

$Features:

1. Offline storage: Cold wallets do not contact the Internet to prevent remote attacks.

2. High security: Because it is not online, it is almost impossible to be hacked remotely.

3. Physical security: requiring physical contact to access (such as hardware wallets or paper wallets).

scenes to be used:

Cold wallets are often used to store large amounts of cryptocurrency for a long time, rather than for frequent transactions. This method is suitable for users who want to put asset security first.

Recovery Seed Phrase

definition:

Recovery words are a set of 12 to 24 randomly generated words used to back up and restore crypto wallets. These words are generated according to the BIP-39 standard.

principle:

1. Generate private key: The recovery word generates one or more private keys through a specific algorithm. The private key is the key to access and control cryptocurrency.

2. Wallet recovery: If a user’s device is lost or damaged, the recovery phrase can be used to regenerate the same private key on a new device, thereby restoring access to the cryptocurrency.

Reasons for Internet connection:

Recovery phrases themselves do not require an internet connection, as they are generated and stored offline. However, an internet connection may be required in the following situations:

1. Transaction broadcast: When using a cold wallet to conduct transactions, the generated signed transaction needs to be broadcast to the blockchain network through an Internet-connected device.

2. Software Update: Cold wallet software or applications may need to be updated online to ensure its security and functionality.

In conjunction with

1. Create a cold wallet: Users can generate a cold wallet and its recovery word completely offline.

2. Store the recovery phrase: Record the recovery phrase securely so that only authorized personnel can access it.

3. Transaction process:

• The offline device (cold wallet) generates and signs the transaction.

• Transmit the signed transaction to an internet-connected device via offline means (such as a QR code or USB device).

• The connected device broadcasts the signed transaction to the blockchain network.

Safety Tips

1. Multiple backups: Store the recovery words $$$### in multiple secure locations to prevent single point of failure.

2. Fireproof and anti-theft: Store the cold wallet and recovery phrase in a fireproof, waterproof and anti-theft place.

3. Regular checks: Regularly check the integrity of your cold wallet and recovery phrase to ensure they can be restored when needed.

Through this combination of offline and online use, cold wallets and recovery words can greatly enhance the security of cryptocurrency assets.