How to Store Crypto Offline: All You Need to Know in 2024

Cryptocurrencies are all about self-custody, which refers to the practice of taking full responsibility for managing and safeguarding the digital assets you own.

Self-custody gives you total control over your cryptocurrencies. Most importantly, it safeguards you from third-party risks such as crypto exchange bankruptcies, hacks, and censorship.

There are several ways to store your cryptocurrencies. However, offline storage is considered the safest method.

Key Takeaways

Offline storage of cryptocurrencies is considered the safest way to store your crypto assets.
Hardware wallets, paper wallets, and air-gapped devices are three ways you can store cryptocurrencies offline.
Offline storage methods are commonly referred to as cold wallets, as your cryptocurrencies are isolated from the Internet.
Cold wallets are perfect for crypto investors who want to buy and hold their digital asset investments.
Hardware crypto wallets can be difficult to set up and use for beginners.

Table of Contents Table of Contents

Key Takeaways
How to Store Crypto Offline
Pros and Cons of Storing Crypto Offline
Best Security Practices for Storing Crypto Offline
The Bottom Line
FAQs

Table of Contents

Key Takeaways
How to Store Crypto Offline
Pros and Cons of Storing Crypto Offline

Show Full Guide

Best Security Practices for Storing Crypto Offline
The Bottom Line
FAQs

How to Store Crypto Offline

Here are three methods to store cryptocurrencies offline:

Offline Crypto Wallet

Offline crypto wallets, better known as hardware wallets or cold wallets, are devices that allow you to store the private keys of your crypto assets.

These devices are commonly referred to as cold wallets because they are not connected to the Internet. In contrast, mobile application and browser extension wallets are referred to as hot wallets because they are connected to the Internet.

The disconnect from the Internet adds a layer of security, preventing attackers from hacking these devices.

An offline crypto wallet typically looks and functions as a USB drive. You can connect these devices to your computer or laptop to manage your cryptocurrencies when needed. Once you have stored the private keys of your tokens on the device, you can disconnect it and keep it isolated from the Internet.

Ledger and Trezor are some of the most popular options. However, a key disadvantage of these cryptocurrency offline wallets is their high costs.

Paper Wallets

A paper wallet is the simplest and easiest way to store cryptocurrencies offline. All you have to do is write down or print the public and private keys that give you access to your crypto holdings.

While paper wallets are easy to use, they can come with risks, such as misplacement of the printed or written keys and degradation of the paper.

Air-Gapped Devices

Air-gapped devices are computers, laptops, and smartphones that are isolated from the Internet to prevent cyber attacks. These devices may be disconnected from other wireless communication forms, such as Bluetooth, Wi-Fi, and near-field communication (NFC).

While air-gapped devices provide users with an alternative to save cryptos offline, they can be difficult to operate when compared to specialized hardware crypto wallets.

Pros and Cons of Storing Crypto Offline

Pros

Storing crypto offline reduces the risks of hacks and key thefts
Cold wallets protect assets from exchange bankruptcies and censorship
They help prevent impulsive spending and keep crypto safe for long-term holding

Cons

Buying hardware crypto wallets and air-gapped devices to store your tokens offline can be costly
Your hardware wallet may not support all blockchain networks, meaning you can’t store unsupported tokens
Hardware wallets can be difficult for beginners to set up and use
Since crypto in offline wallets isn’t easily accessible, you might miss trading opportunities and new trends
Tokens in cold storage won’t earn returns, unlike online activities such as staking
Hardware wallets and paper wallets can be damaged, stolen, or misplaced

Best Security Practices for Storing Crypto Offline

If you are thinking of storing your crypto tokens offline, here are the best security practices that you need to know:

Create a backup

You may lose your hardware or paper wallet due to damage, loss, or theft. Therefore, it is important to create a backup so that you can recover your wallet when such an event occurs.

Wallet diversification

The practice of “not putting all your eggs in one basket” is important when it comes to crypto management. If you spread your crypto assets across multiple wallets, you will reduce the risk of losing all your funds to thefts, hacks, and scams.

Passwords

Specialized hardware wallets allow users to add an extra layer of security through customizable passwords. Always create long passwords using a combination of characters, numbers, lowercase and uppercase letters.

Biometrics

Hardware wallets also allow users to secure their devices using biometrics such as fingerprint and facial recognition. Remember to set up your biometrics as soon as you start using your offline cryptocurrency wallet.

Verify signature requests and transactions

When managing crypto tokens in and out of your hardware wallet, you should always double-check and verify signature requests and transactions. Remember, hardware wallets are safe but not foolproof.

The Bottom Line

If you are a beginner who has just learned how to store crypto offline, we recommend you start your self-custody journey by learning how to use an online crypto wallet or hot wallets. These wallets are easier to use and set up. After gaining self-custody experience, you can later try your hand at cold storage wallet options.

Whether you use a hardware wallet, paper wallet, air-gapped device, or online wallet, your decision to self-custody crypto assets is commendable. Remember, cryptocurrencies are not only about surging market prices but also about the philosophy of decentralization.