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What is cold storage?

Using "cold storage" for digital assets means keeping keys offline and disconnected from the internet. This is to reduce the risk of theft.

TL;DR — Cold storage means keeping the keys that protect your bitcoin on a device that is never connected to the internet, making them far harder for attackers to reach. Casa's 3-key and 5-key vaults are built on cold storage principles, with hardware keys held offline and multisig (requiring more than one key to authorise a transaction) adding a further layer of protection.

What cold storage means

A key is the cryptographic secret that authorizes the movement of bitcoin. If a key is stored on an internet-connected device like a phone, a browser extension, or an exchange account, it can potentially be reached by an attacker remotely. This is known as a "hot" storage model.

Cold storage is the opposite: keys are held on a device that has never been, or is no longer, connected to the internet. Because there is no network path to the key, remote theft becomes significantly harder.

The majority of large-scale bitcoin theft has historically involved keys stored online. Cold storage directly addresses this by removing the network as an attack surface.

How hardware devices implement cold storage 

A hardware device is a small physical device designed to store a hardware key (a signing key held on a hardware device) offline. The private key is generated and stored inside the device and never leaves it in an unencrypted form. When you need to sign (authorize) a transaction, you connect the device and confirm the action on its screen, the key itself stays on the device throughout.

Some hardware devices go further by being air-gapped (communicating via QR code or MicroSD card only, never USB), which means they never connect to a computer at all. Coldcard, Keystone, and Passport are examples of air-gapped devices supported by Casa.

How Casa's vault adds another layer 

A hardware device alone is a single point of failure, if it is lost, damaged, or compromised, so is access to the bitcoin protected by that key alone.

Casa's vault uses multisig (requiring more than one key to authorize a transaction), which means no single key can move bitcoin by itself. In a 3-key vault, a signing quorum (the minimum number of keys required to send bitcoin) of 2-of-3 keys is needed. In a 5-key vault, the quorum is 3-of-5.

This means that even if one hardware key is lost or stolen, your vault access is not immediately at risk. The other keys in your signing quorum are still required. 

Casa is non-custodial, you hold your own keys, and Casa cannot access your bitcoin on your behalf.

For guidance on which hardware device is right for your vault, see Supported platforms and hardware device firmware

Still have questions?

  • Standard members: email help@team.casa with your question.
  • Premium and Private Client members: contact your Client Advisor directly.
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