Cold, offline cryptocurrency storage is often considered as a more secure method for storing your digital assets. By being offline, your data cannot be hacked without it being physically stolen first, so providing you keep your hard drives or cold wallet in a safe and secure place, in theory, your assets will be untouchable.
Of course, if you lose your storage solution, then that changes somewhat.
At the start of April, a man from Lucerne in Switzerland is reported to have lost a bag containing two cold storage wallets. Combined, the wallets are estimated to contain around $800,000.00 worth of cryptocurrency.
The man in question did report that he usually keeps the wallets within a safe in the bank, but occasionally requires access to them in order to make transactions. On this occasion, it seems that he misplaced the bags.
Initially, he offered a $40,000.00 reward to anyone who could locate and return the wallets, news out last week however reports that he has now upped this bounty to $135,000.
The bag contained a Keepkey and a Ledger Nano S, plus an Acer Aspire V3 771g laptop.
This person has genuinely been very unlucky here. Part of the problem is that, despite their being on online back up of his assets, the man apparently no longer knows the recovery key required to access them so therefore the backups are rendered useless.
What you should take away from this is that this really does highlight the vulnerability of your digital assets, no matter how to decide to store them.
Then, even if you do have an online live back up, you still need to be able to recall the codes required to access that back up, where do you record the codes?
It’s a never-ending chain of risk and a never-ending data handling problem.
If you do have cold storage wallets, be sure to look after them. If you have a bag containing $800,000.00 worth of data, don’t leave it in your car, don’t leave it in a shop and don’t leave it on a kerb.
Overall, be sensitive with your assets, look after them because if you don’t they won’t look after you, as I’m sure this poor gentleman from Lucerne will tell you.