What is Offline Storage?

Offline storage is the storage of the private keys of a cryptocurrency account in an offline device. Although it is common to say that offline storage is used for cryptocurrency itself, it’s actually used to store the keys that grant access to the crypto assets.

Offline storage means that an internet connection is not required to access the keys. This prevents unauthorized attempts to access the storage device, thus reducing the risk of the keys or the crypto assets being stolen or misused. Offline storage makes it virtually impossible to steal sensitive information without physical access to the device.

Online storage, on the other hand, is used to keep data on devices that maintain an active internet connection. Such devices can be easier to access for malicious purposes as the encryption and other security measures in place may be compromised via the network.

Although offline storage devices can come online for a short period of time while transferring transaction data to the network, they go offline after the procedure is finished. Any malicious party would not be able to view the private key, which is stored offline even if the transaction is accessible.

The term offline storage is often used interchangeably with cold wallet, or hardware wallet. Ledger, Trezor, and KeepKey are some of the best-known cold wallets. Other devices, such as CDs, USBs, or even paper wallets, can be used for offline storage.