Crypto cold storage: a step-by-step setup that survives this year's hacks
Cold storage means keys made and kept on a device that never touches the internet, for money you won't move for months. None of 2026's hardware wallet blowups cracked a chip. They came through who sold the device, how the seed was made, and leaked buyer data. Each step below closes one of those.
What went wrong, and the step that fixes it
| What went wrong | Where | The step that closes it |
|---|---|---|
| Implanted devices sold through an authorized reseller stole recovery phrases. | Ledger, Oct 2026 | Steps 2 and 9 |
| A firmware bug made weak seeds that attackers regenerated offline. | Coldcard, Jul 2026 | Step 4 |
| The key behind the website's genuine-device check was stolen. | Keystone, Oct 2026 | Steps 2 and 3 |
| Leaked buyer and newsletter lists were used for phishing. | Trezor, Aug–Sep 2026 | Steps 2 and 8 |
| Signers of an exchange's 2-of-3 cold wallet approved what a tampered web interface showed. | Bybit, Feb 2025 | Steps 7 and 8 |
Pick a setup
Simple: one hardware wallet
Steps 1 to 8. One device, one steel backup in two places, tested before you fund it. Right for most people.
Strongest: 2-of-3 across three makers
Steps 1 to 9. Three devices from three makers, any two can spend. No single maker's failure can move the money.
Step by step
Decide what goes cold
Cold storage is for money you won't move for months. Anything a bot or an agent trades stays in a separate trading float, and profits sweep back to the vault on a schedule (vault, float and sweeps). Write down roughly how much belongs in each, so the vault never becomes the thing you trade from.
Buy the device from the maker's own store
Implants in 2026 came through a reseller the maker had authorized, so even "authorized" isn't a guarantee. Buy direct, or check the seller first with our reseller check. Buyer data leaked at several makers and their partners this year: if you can, ship to a pickup point or an office rather than your home. Scores for the devices we track: OneKey Pro (94%), BitBox02 Nova (89%), Blockstream Jade Plus (79%), Trezor Safe 5 (78%), CoolWallet Pro (72%), Foundation Passport Prime (66%), Tangem Wallet (66%), Keystone 3 Pro (54%), Coldcard Q (49%), Ledger Flex (49%).
Inspect it and run the genuine-device check
Check the packaging, then run the maker's own genuine-device check in its official app. Reject any device that already has a PIN set, shows recovery words, or came with a filled-in recovery card. Update firmware only from the maker's app or site. A genuine check can fail too (Keystone's check key was stolen), which is one more reason to buy direct.
Make the seed on the device, offline, with your own dice
Don't rely on the device's random number generator alone. Current Coldcard firmware requires your own input, dice rolls among the options (source), and its docs ask for 50 rolls for a 12-word seed or 99 for 24 words (source). Keystone 3 Pro has a dice mode (source), and BitBox02 can build your words from dice (source). In the Coldcard bug, people who had added at least 50 rolls were not at risk (source). Roll real dice in private, never photograph or type the words anywhere, and destroy the roll sheet. If your device has no dice option, the 2-of-3 setup in step 9 covers a bad random number generator at any one maker.
Back up the words on steel, in two places
Paper burns and floods. Use a single solid piece of stainless steel or titanium, the design that held up best in fire, corrosion and crush tests (source). Keep two copies in two different places. Optional: a passphrase adds a second secret, so the words alone don't open the wallet, but a lost or mistyped passphrase locks you out for good, so back it up separately (source). It doesn't help if the device itself is compromised.
Watch from a computer, sign only on the device
Set up a watch-only wallet that holds no keys: on Bitcoin, Sparrow imports the device's public key by QR code or microSD, so you can see the balance and get addresses (source). Check every receive address on the device's own screen before you share it.
Test recovery before you fund it
Send a small amount. Wipe the device, restore it from your steel backup, and check it shows the same first address. Then spend the small amount out, reading the address and amount on the device screen. Only after that, move the rest. A backup you've never restored from is a guess.
Live with it safely
Before you approve anything, read the address and amount on the device screen, not your computer: the Bybit signers trusted a tampered interface (source). No maker will ever ask for your recovery words. An email, DM, "security alert" or support form that asks for them is phishing, and leaked buyer lists make those messages look real. Keep firmware current from the maker's app, and follow its advisory if an incident hits your model: on Coldcard, updating doesn't repair a seed made on affected firmware (source). We track maker incidents on each custody page.
Strongest: 2-of-3 multisig across three makers
Use three devices from three different makers. Each makes its own seed (with dice where it can), and a coordinator such as Sparrow builds the wallet from their public keys, by QR code or microSD (source). Any two devices can spend; one can't. That means no single maker's failure this year (an implant, a weak seed, a stolen check key) could have moved the money alone. Back up the wallet's output descriptor with every seed: two seeds without it can't rebuild the wallet. Test all three signing pairs with a small amount before funding (source). A weak key stays weak inside a multisig; it just can't spend on its own (source). Keep the three devices and backups in different places.
Ethereum, other EVM chains and Solana
- Ethereum and EVM chains: a Safe account with hardware-wallet signers gives you the same 2-of-3 idea as a smart contract. Bybit's cold wallet was a Safe, and its signers approved a transaction they didn't read on their devices (source). Read every transaction on each signer's screen.
- Solana: Squads is the usual multisig. Its docs say a Ledger connects through Phantom or Solflare with blind signing turned on (source), so check each proposal in Squads and on an explorer. Keystone documents a 2-of-3 Squads vault with Keystone, Ledger and Trezor signers (source).
- Buying direct, the steel backup and the recovery test (steps 2, 5 and 7) work the same on any chain.
Where software wallets fit
Phone and browser wallets keep keys on an online device. Use them for spending money and a trading float, and check the link before you install one: many of this year's software-wallet incidents were fake copies of real wallets. Software wallets and their recent incidents.
Questions
Is a hardware wallet cold storage?
It is when the recovery words were made on the device offline and have never been typed into anything online. A hardware wallet you plug into an online app every day for trading is closer to a warm wallet: keep a separate device for the vault.
Do I need multisig?
No. One hardware wallet set up with the steps above is fine for most people. Multisig is for amounts where one maker's failure, a lost device or a stolen backup would be too costly, and it takes more care to back up and test.
Is keeping crypto on an exchange's cold storage the same thing?
No. The exchange holds the keys, and you rely on its controls. Bybit's cold wallet was drained in February 2025 after its signers approved a transaction a tampered interface hid from them.
What about a software wallet?
A software wallet keeps keys on an online phone or computer. It's fine for spending money and a trading float, not for the vault. See how they compare on the custody hub.
Should I use a paper wallet?
Paper burns, floods and fades, and generating a paper wallet on an online computer exposes the key. A hardware wallet with a steel backup does the same job with fewer ways to fail.
Sources
- COLDCARD docs: master seed and dice rolls
- COLDCARD security status and seed-generation advisory
- Bitcoin Well: users who added 50+ dice rolls were not at risk
- Keystone: creating a wallet with dice rolls (Keystone 3 Pro)
- BitBox: create a Bitcoin wallet with your own entropy
- Casa: what entropy is, and why multisig doesn't strengthen a weak key
- Jameson Lopp: lessons from stress testing 70 metal seed backups
- Trezor: what a passphrase is
- Sparrow: set up an air-gapped hardware wallet with QR codes
- Bitcoin Well: back up and recover a 2-of-3 multisig (descriptor, test every signing pair)
- Keystone: Bitcoin multisig with Sparrow (Keystone, Coldcard and more)
- CertiK: Bybit incident analysis (Feb 21, 2025)
- Squads docs: create a Squads multisig
- Keystone: a 2-of-3 Solana multisig on hardware wallets with Squads