Cold storage is storing cryptoassets on a wallet that is not connected to the Internet. These can be either paper wallets, where a private key and bitcoin address is stored on a piece of paper, or on a hardware wallet—a small electronic device that stores the private key and keeps it private to everyone, and is not connected to the Internet.

If you lose the hardware wallet, you can recover the information onto another by using a secret recovery phrase of upward of 32 random words.

Cold storage is considered the only truly safe way to store cryptoassets as being connected to the Internet always leaves some opening to hackers.

However, cold storage also leads to another problem. Because the devices are nearly impossible to break into, you can lose access to the cryptocurrencies stored on them by forgetting your password or losing the device, and then misplacing your recovery phrase.

This happened with around $200M in cryptoassets when the CEO of the former Canadian exchange, Quadriga, suddenly died and took the exchange's cold storage password and recovery phrases to his grave.

The most popular hardware wallets are:

• Ledger Nano. Ledger creates two devices that look like USB sticks, the Nano S and Nano X—the only difference being that the S requires being plugged into a device, and the X can be accessed via Bluetooth.
• Trezor. Trezor sells two devices, the One and the Model T, with the main difference being that the Model T has a touchscreen instead of physical buttons.

We recommend the Ledger Nano X. Learn everything there is about using it in this guide.