The act of storing cryptocurrencies in devices or systems not connected to the internet.
Offline storage refers to the storage of private keys
of an account and the funds contained within in an offline device, which means it does not maintain a constant and continuous connection with the internet. This is done to prevent unauthorized and/or malicious access to the device, which can result in theft or misuse of user funds. Offline storage ensures that attackers have no way of accessing the device, making it theoretically impossible to steal crucial and sensitive financial information.
This is opposed to online storage
, in which data is kept on devices with an active connection to the internet. Despite encryption and other security measures, there is still a possibility of bad actors accessing the private keys of online storage by bypassing or breaking security measures since the device can be attacked without any time constraint.
In contrast, offline storage devices still come online for a brief period when a transaction has to be sent to the network. However, most go offline as soon as it’s done. Even when a cyber thief is able to access a transaction, the thief would not be able to view the private key used for it. This makes it tremendously hard, if not nearly impossible, to attack the device in this short time window.
Typical examples of offline storage devices are hardware wallets like Ledger, Trezor, KeepKey, as well as offline devices such as CDs, USBs, offline computers, etc.