Can a Cold Wallet Be Hacked? 5 Potential Weaknesses

A cold wallet is typically a physical object: a cold card, joystick, or other device, that stores your private keys offline. The concept here is that if you Private keys are kept offline., Unbreakable.

This is how cold wallets are, especially. Cold Storage Hardware WalletsHot wallets have the advantage of security and protection compared to hard wallets, also known as software wallets.

Hot wallets are always online and store your private keys and seed phrases on their online platform, making them more vulnerable to cyberattack.

But as technology and the world continue to evolve, DeFi Wallet The network is expanding, and new vulnerabilities are always emerging, even when we think our cryptocurrencies are safe.

So, this raises the question: Can a cold wallet be hacked?

In this post, we will look at What is a cold wallet? How it works and examine the potential threats a cold wallet faces. We’ll explore real-world cases and share our secrets on how to store your crypto safely.

What do we mean by cold wallet?

The main idea behind any cold storage is: Remove the threat of hackers Access your private keys and steal your cryptocurrency.

This is done by storing your private keys offline and therefore not having to connect to the internet to store your cryptocurrencies, which theoretically reduces the risk of cyber attacks.

Types of cold wallets

Hardware wallets

These are physical devices designed to store the private keys to cryptocurrencies. You can only connect to the internet if you make a transaction. Popular hardware wallets include Bitcoin MaterialArbitrage, Tanjimand others.

➕Advantages

• High protection.
• Mobility.
• A tangible object to store your cryptocurrencies.

➖Disadvantages

• Expensive (upfront payment for the device).
• Risk of material damage or loss of items.

☝️We recommend using a separate wallet to store your seed phrases, such as DIY materials.

Paper wallets

a Paper wallet It is a printed or written document that contains your private and public keys. This information is usually generated by a software program.

➕Advantages

• Low cost.
• Offline security.

➖Disadvantages

• Fragile material.
• User error when printing (if printing to a public printer or viewing online when generating keys and QR code).

Airtight computers

An isolated computer is a device that is never connected to the internet. It is used to generate and store your private keys, make transactions, and sign them offline. These transactions are then transmitted to an internet-connected device that sends them to the blockchain (usually using a USB or QR code).

➕Advantages

• High protection
• Diversity and multiplicity (can be used to store private keys but also to create wallets and sign transactions).

➖Disadvantages

• Big, bulky machine.
• Complex setup for creating transactions, generating wallets, and maintaining airtightness features from offline to online devices.

5 Potential Weaknesses of a Cold Wallet

While cold wallets are designed to provide the highest security measures for your cryptocurrencies by keeping your private keys offline, They are not completely free of weaknesses.Understanding these potential risks is critical.

Let’s take a look at some of the weaknesses of cold wallets and share some real-life examples so you can learn from the mistakes of others.

1. physical theftThis is probably the easiest way for hackers to gain control of your private keys and cryptocurrencies. If your cold wallet falls into the hands of an experienced hacker, all they have to do is unlock your PIN and passcode.

🚨This is why Store seed phrase Keeping your wallet on a separate system is crucial. If your cold wallet is lost or physically stolen, you can recover your private keys and put them on a new hardware wallet before the thief has a chance.

2. Firmware attacksHardware wallets that have software programs implemented in them can be vulnerable. Firmware attacks If the attacker has physical access and can change the device.

Perhaps the most famous firmware hack is when a 15-year-old hacker named Slim RashidThe Ledger Nano S was unlocked by loading modified firmware onto the device that revealed the user’s private keys.

3. supply chain manipulationThis happens during the production process or shipping of the cold wallet. before it reaches the customer.

This is probably one of the “rarest” vulnerabilities to hack, but it is still possible. Always remember to buy hardware wallets from Authorized Retailers Make sure the package has not been opened or tampered with.

In this example of manipulation, the physical device was modified in three ways to give criminals access: They disabled the security mechanisms; replaced the random seed phrase with one of 20 pre-selected phrases; and used only the first letter of any additional password.

4. scam tricksHackers and scammers use fake tools such as names, emails, websites, and phone calls to trick you into revealing your private keys or seed phrases.

Unfortunately, this is probably the most common and easiest hacking trick in the book.

The responsibility lies solely with you: the user.to be careful of fake and personal accounts so that your private information is not revealed.

5. damage or lossDamage to your cold wallet due to simple wear and tear or natural factors, such as water or fire, can be detrimental to its recovery. Losing it completely without proper recovery planning can result in permanent loss of your funds.

Choosing a Powerful Hardware Wallet Water and fire resistant It is a good starting point to protect your wallet. Keeping the physical device in a secret and secure place, such as safe box At home is usually the best solution.

Simple Tips to Protect Your Cold Wallet and Cryptocurrencies

➡️ Use a reputable hardware wallet.

➡️ Always purchase hardware wallets from official and licensed retailers.

➡️ Make sure the device is in good condition upon receipt.

➡️ Enable PIN protection.

➡️ Set up a strong PIN.

➡️ Back up your recovery phrase, preferably on physical forms, such as cool engraved card.

➡️ Update firmware regularly.

➡️ Be careful of phishing attempts.

➡️ Never share your private keys or recovery phrases with anyone.

The most famous hacks and how they could have been prevented

Over the years, there have been several high-profile hacks where cold wallets were compromised. Like the example we mentioned before with Ledger Nona S and Saleem Rashid, many of these Bitcoin Scams and Fraud It occurs when there is a lack of user responsibility and a malfunction of the device.

Here are some real-life examples that will help you gain a deeper insight into hacking strategies and how you can learn from them.

Kraken-Trezor Hack

In 2020, security Kraken researchers A security vulnerability was intentionally found in the Trezor hardware wallet. They were able to extract the seed phrases on the device using voltage glitch technique.This type of hack involves manipulating the device’s power supply to cause errors that reveal your sensitive information.

A hacker would need to physically obtain your cold wallet to be able to use this method, but this highlights the importance of securing your physical device in a safe place.

You can see how they did it. here

Google Play Store Faces Hackers

In April 2024, Google filed an application Lawsuit against a group of cryptocurrency scammers who allegedly used phishing schemes to trick more than 100,000 people worldwide into downloading fake cryptocurrency exchange apps to the Google Play Store.

We know that this example is not specifically related to a particular cold wallet, but it is related to It shows that even trusted platforms can be vulnerable.

If your chosen cold wallet relies on a downloaded app to perform exchanges or trading, Make sure you are using the official app.

💪 Pro tipYou can use the QR codes that come with the actual device to ensure your connection to the official app.

The best choice for cold storage

Unlike traditional hardware wallets, physical wallets do not have an electronic component and do not require USB cables to connect to phones or computers to manage BTC, ETHER, or USDT.

instead of, Material wallets have a unique and highly secure solution to protect your private keys and seed phrases by eliminating these sensitive features of some other cold wallets.

No electronic components

This means that hardware wallets are much harder to hack because they cannot be vulnerable to firmware attacks or physical manipulation. Unlike Trezor or other cold wallets, There are no wires or circuits to fiddle with here..

No USB connection required

Never connect your cold wallet to your phone or computer using any USB cable or joystick. Instead, if you want to manage your cryptocurrency, you can scan the QR code. This helps reduce the exposure of your private key to devices across the internet.

Top Security Group

Use both cold storage and cold storage. Material Seed Wallet They are the best in terms of security. Both wallets are made of stainless steel, making them fire and water resistant and able to withstand other physical damage.

Even if hackers gain physical access to your wallet, without the recovery key phrase, they will not be able to access your private information.

common questions

Are cold wallets really safe?

• Cold wallets will always be more secure than hot wallets. Although some cold wallets are considered more secure than others.

Is it possible for a cold storage wallet to break?

• Yes, if they are electronic devices, it is possible for a physical wallet to break. That is why using a cold card wallet and storing the recovery phrase is the best option for the security of your cryptocurrency.

What if my cold wallet is stolen?

• If your cold wallet is stolen, the thief will still need your PIN or recovery phrase to access your private keys. This once again highlights the need for secure storage of your seed phrase.

Has your hardware wallet been hacked before?

• There have been several instances where hardware wallets have been hacked, but proper security measures will help reduce these hacking attacks.

What You Need to Know About Cold Wallet Hacks

Can a cold wallet be hacked?

Yes.

However, staying up to date with the latest hacking techniques and scams, as well as using one of the Best Hardware Wallets It comes with seed phrase storage which will provide the best solution to keep your cryptocurrencies safe.