In cryptocurrency trading, this simply pertains to the act of keeping cryptocurrencies in devices that are directly connected to the internet.
Of late, the industry has seen the development of decentralized cloud storage. One of the notable features that this service avails of its users is the encryption of the client’s data. In some platforms, the data is first encrypted and then split into a number of “shards”. Afterward, it is distributed across the network and is audited through full nodes that ensure right storage capacity, data integrity, and availability.
However, through the storage of an offline wallet, the token holder’s data are open to a number of risks. One of them is presented through the provision of one’s private key to the wallet provider itself. What this means is that the user is compelled to wholly trust the online wallet provider. In addition to this, the secret key should be kept online so as to initiate transactions, leaving one’s wallet to the vulnerabilities of online storage.