Self Custody with a Cold Wallet
“Not your keys, not your coins”.
At turbulent times, the digital assets are safer hibernating in a cold wallet, rather than staying in a centralized exchange (essentially a database) or decentralized exchange (smart contracts can have wormholes). If you have not ordered a Ledger or Trezor for self custody yet, and happen to have 1 or 2 used iPhones, please read carefully for one of the best hidden secrets in cryptocurrency.
The simple version:
A. Make sure your used iPhone has never been jailbroken. Reset to factory origin status.
B. Download any non–custodial wallet (such as coinbase wallet, trust wallet, imtoken, exodus) app. Non-custodial means you, not the exchange or platform, controls the private key. Write down or remember 12 or 24 word “seed phrases” in private.
C. Withdraw bitcoin from exchange to the address of your cold wallet.
D. Remove SIM card, keep your phone in airplane mode, go off grid, stay off line. Turn off the phone (now a cold wallet) and let it sleep in a private physical vault.
The advanced version:
With certain types of non-custodial wallet apps (such as tokenpocket), you can set up an “observer wallet” as a companion to the “cold wallet”. Essentially, the observer wallet serves as a blockchain explorer to the cold wallet. The observer wallet stays online for monitoring, while the cold wallet stays offline to keep the private key safe. When it comes to the time to withdraw the funds, you need both the observer wallet and the cold wallet to create signatures and broadcasting.
For more information, please refer to the following references: