Cryptocurrency prices may be highly volatile, but one thing for sure is that they are here to stay. They were only seen as an alternative to make efficient transactions across borders in the early days. However, governments’ arbitrary inflation of fiat currencies has seen Cryptocurrencies become a far more reliable store of value.
But like every nascent industry, the storage of digital assets in the blockchain world has been bedeviled by specific challenges. The anonymity and instantaneous features of blockchain transactions mean that the industry is disproportionately susceptible to fraud.
There are two broad ways that users can store their cryptocurrency assets. Hot-wallets (software wallets) can operate on the web or through internet-enabled devices, and Cold wallets, which are physical devices that can store crucial crypto access keys.
So far in 2021, Overall losses of funds across decentralized ledgers have exceeded $12 billion. Fraud and theft accounted for 90% of that sum, while 10% was due to crucial user errors such as loss of private keys, transfer of funds to wrong addresses, etc.
This indicates that software wallets and custodial wallets carry a significantly higher risk. With Cold storage, on the other hand, assets are stored offline, and consequently, the risk of loss due to hacks, fraud, and operational lapses is mitigated.
Experts widely agree that cold wallets are the safest and most secure way to store cryptocurrency assets.
In simple terms, cold storage refers to keeping digital assets (cryptocurrencies and tokens) in entirely offline devices. There are generally two forms of Cold storage, namely, paper wallets and hardware wallets.
The use of a Paper wallet involves generating private keys and printing them out or writing them down on a piece of paper. Users can then keep them in a secure location of their choosing.
On the other hand, hardware wallets come from digitally-encrypted devices such as a USB stick. These small plug-in devices store critical information needed to authorize cryptocurrency transactions. By using a hardware wallet, users get to store cryptocurrencies offline, far away from the reach of remote hackers.
Advantages of using Cold Storage
Because cold wallets are not perpetually connected to the internet, they can’t be hacked by hackers on another side of the world. Anyone to steal the crypto assets would have to attack the user physically, which is quite unlikely.
2. Safe Storage
Users can reproduce the access keys and store them in different places.
3. Easy Transfer of Ownership
Millions of dollars worth of crypto assets are lost due to the holders dying without disclosing their software wallet passwords to anyone. With cold storage, investors can easily hand them to an heir as inheritance upon death or unconsciousness.
4. Extensive Coin Support
Unlike Software wallets, cold storage wallets can store a wide range of coins and tokens.
There have been many cold wallet brands on the market in recent times. Some of these companies include Trezor, Ledger, Decent, SecuX, etc. But each of these options has a few downsides.
For instance, if a user misplaces the device or gets damaged, they may not retrieve the funds. Also, these hardware devices are pretty expensive, and it causes some users to go for cheaper and less secure options.
Companies like Simba have studied the market and developed innovative solutions to provide advanced alternatives for cold wallet users globally. Simba is a Swiss, Liechtenstein and UAE registered company that offers cold storage of cryptocurrencies in secure locations around the world.
Simba’s unique cold hardware wallets deploy a programmed script and multi-signature algorithms to provide high security and fully-encrypted access to assets via confirmation by single or multiple authorized faces.
Some of the Innovative Key Features of Simba Storage:
Complete and easy recovery of funds in case of loss of access to the wallet.
The ability to legally purchase Bitcoin directly in real-time.
Maximum encryption and protection with digital asset information stored across four countries
Provision of real-time liquidity with a native ERC-20 token for convenient and quick transactions.
Having been described as the wild-wild west of global finance for a long time, many legal companies are springing up across the crypto world, and they are poised to change the narrative. It is expected that innovative companies like Simba will soon overtake the evil and illegitimate ones. Cases of fraud, scams, and theft of digital assets are set to be significantly curtailed across the blockchain world