Cold Storage

Cold Storage refers to the practice of storing cryptocurrency offline, away from the internet, for enhanced security. It involves using a hardware wallet or a paper wallet, which are not connected to the internet and thus, less vulnerable to hacking attempts.

Cold storage matters because it significantly reduces the risk of theft from hackers. For instance, in 2018, a hacker stole $500 million from the Japanese cryptocurrency exchange Coincheck, highlighting the need for offline storage. By keeping cryptocurrencies in cold storage, users can protect their assets from such threats.