Understanding Asset Storage: Why Stablehouse Chose Warm Storage
When it comes to safeguarding digital assets, choosing the right type of storage is critical.
Below the key differences between cold, hot, and warm wallets and why Stablehouse decided on warm storage for its operations.
Cold Wallets
Cold wallets store private keys offline, making them highly secure against online hacks. This method requires manual processes to access funds, adding another layer of protection. For example, hardware wallets must be connected to a secure computer, and transactions must be signed using the device.
This approach differs notably from traditional finance, where physical asset safeguarding is entrusted to banks.
Hot Wallets
Hot wallets are always connected to the internet, allowing quick and easy transactions. They are best suited for frequent trading, providing a user-friendly interface for investors to swiftly buy, sell, or exchange digital assets for everyday needs.
However, this convenience comes at the cost of increased vulnerability. If the private key is compromised, the wallet becomes susceptible to hacks.
Warm Wallets
Warm wallets strike a balance between the security of cold wallets and the accessibility of hot wallets. They are connected to the internet but incorporate additional security measures, such as requiring human intervention to sign transactions.
This setup makes warm wallets suitable for scenarios that need both security and efficiency, such as managing institutional or large-scale assets.
Why Stablehouse Chose Warm Storage?
Stablehouse opted for warm storage because it combines security with operational efficiency. In warm storage, cryptographic keys are stored securely both in the cloud and on employee-owned devices.
Human involvement is required to sign transactions, and with enhanced controls in place, funds held by Stablehouse are kept safe from internal collusion and system hacks.
By choosing warm storage, Stablehouse achieves the ideal blend of protection and functionality for its clients.