What is cold storage?
Cold storage is a term used for a wallet which is offline, disconnected from the Internet. This means that it’s safe from hackers and other threats.
Why should you choose cold storage?
Cold storage is the best option if you hold a more substantial amount of Monero which you are not planning on spending too soon. This way, your tokens will be protected against hackers. Offline wallets are useful also if you want someone else to have access to your Monero.
Required equipment and software
The easiest way is to use MoneroAddress utility on a computer which is connected to the Internet and which is running TAILS. This stands for “The Amnesic Incognito Live System.”
It is an operating system which has to be run from a USB drive, and it will safely ensure that your computer is not compromised while the MoneroAddress utility is running. It will also make sure that no trace of your private keys will remain on the computer when you turn off the system.
If you don’t trust an Internet-connected computer running TAILS, you can also take other safety measures such as purchasing a new laptop which has never been connected to the Internet and which you will only use for this purpose. You can also use an older PC or laptop without an Internet connection.
You could save the MoneroAddress utility on an Internet-connected computer to a USB drive to use it on that computer. You can choose the safety measures that make you feel the most secure.
First of all, you have to create a bootable TAILS USB drive. You will need two empty USB drives, and each of them should have at least 8 GB. You don’t have to install TAILS, but here are two excellent reasons for which it’s recommended that you do:
This way, there’s a smaller risk that someone serves you a wrong version of the MoneroAddress utility and steal your money.
It’s a lower risk for hackers to spy on you and steal your Monero private keys.
After you install and boot up TAILS, you can then prepare to generate your cold storage wallet. You will need paper and a pen.
Creating the cold wallet
You will have to make sure that you are in a private location and a secure place. Make sure that there are no cameras around and that no one can spy your activity. Now, follow these steps:
- Start up TAILS and get connected.
- Proceed to the MoneroAddress utility and make sure that the HTTPS certificate is valid.
- You will see that a new, random address will be generated automatically.
- Now, fold your paper in half horizontally, and on the outside, write your public address.
- Then, open the paper and write the 25-word mnemonic seed. It’s vital that you don’t make any mistakes.
This seed can be used to generate both your address and the private keys that you need to spend and unveils your transactions. Guard the paper exceptionally well.
Checking the wallet balance
If you are using Monero for its privacy features, it’s important to understand that exposing your view to the public will compromise your privacy. It’s also essential to realize that it’s not possible to have a watch-only wallet like the one that’s used with Bitcoin.
Spending from the cold storage wallet
You can restore the cold wallet to a connected client, but once you do this, your funds will no longer be secure because the private keys have been exposed to an Internet-connected system. It’s really recommended to send any large leftover amount of Monero to a new cold storage wallet after you made the transactions.