Cold Wallet
Quick Answer
A cold wallet is cryptocurrency storage not connected to the internet, providing maximum security against hacking. Examples include hardware wallets like Ledger and Trezor.
Full Definition
A cold wallet is a cryptocurrency storage device or method that is not connected to the internet, providing maximum security against hacking and remote theft. Examples include hardware wallets (Ledger, Trezor) and paper wallets. Cold wallets are used for long-term storage of digital assets and are a critical component of institutional custody solutions. Payment providers use cold storage for reserve funds while keeping operational funds in hot wallets for faster transaction processing.
Related Terms
Chargeback
A chargeback is a forced payment reversal initiated by a cardholder's bank. Crypto payments are chargeback-free by design because blockchain transactions are irreversible once confirmed.
Confirmation Time
Confirmation time is the duration between a transaction being broadcast and receiving its first block confirmation. It ranges from under 1 second (Solana) to 10 minutes (Bitcoin).
Consensus Mechanism
A consensus mechanism is the protocol by which a blockchain network agrees on the state of the ledger. Common types include Proof of Work (Bitcoin) and Proof of Stake (Ethereum).
Cross-Chain
Cross-chain refers to interoperability between blockchain networks, enabling asset transfers across them. Essential for multi-chain payment gateways that accept payments from any supported chain.
Crypto Payment Gateway
A crypto payment gateway is software that enables merchants to accept cryptocurrency payments and receive settlement in fiat or stablecoins. It handles wallet connection, exchange-rate conversion, and payout.
Custodial Wallet
A custodial wallet is a cryptocurrency wallet where a third party holds and manages the private keys on behalf of the user, offering convenience but introducing counterparty risk.