Security breaches have long been a thorn in the side of cryptocurrencies, growing alongside the popularity of digital assets like Bitcoin and Ethereum. The recent high-profile attacks have sparked an important conversation between institutional and retail crypto holders about the custody of digital assets. Custody is a broad term that refers to the ability to hold, move, and protect crypto assets. Whether you are an experienced crypto investor or have just bought your first satoshis, there are several wallet solutions on the market today, each with their own advantages and disadvantages. These are broadly classified into two camps: cold wallets and hot wallets. About the Author Dmitry Tokarev is CEO of Copper.co The main distinction between a cold wallet and a hot wallet is that hot wallets are connected to the Internet, while cold wallets are not. Active wallets make it easy to access and trade in digital assets. Cold wallets, on the other hand, are offline, which means that the signing keys are kept on physically isolated hardware devices with no internet connection. Since cryptocurrencies are more vulnerable when stored online, cold storage is considered safer for long-term holding of large balances - all, long-term HODLs (crypto investors who buy and hold their positions no matter the price) to institutions that have millions of dollars in funds. That's not to say that cold storage solutions don't have drawbacks. Cold wallet transaction times take longer than their online counterparts. In addition, physical media is subject to risk, as it can be physically defective, have internal software problems, or be stolen. There are different types of cold rooms, the most basic being the paper wallet, which is exactly what it means: a piece of paper. The paper wallet contains a user's private key, handwritten, printed, or displayed by a QR code. Without the private key, the crypto cannot be accessed or stolen. Therefore, the key should be kept safely in a safe or somewhere where it cannot be easily found to prevent theft. In the hardware wallet version of cold storage wallets, offline USB devices or smart cards are used to generate these private keys. Cold storage also comes in the form of offline software wallets, where the authentication process is divided into an online segment and an offline segment. The online segment contains the public key, while the offline portion securely generates the private key. Hybrid wallets have also emerged that allow for dual offline and online technologies so that users can store an amount of crypto safely offline, while keeping some online for frequent transactions or purchases. This hybrid storage strategy allows users to minimize their exposure to hot wallet risk, but it also means they have to manage two different wallets to access all their funds. The newest and most advanced standard for institutional-grade wallet security is Multi-Party Computing (MPC) wallet technology, as used by Copper. MPC wallets include the latest security enhancements that address the dangers of private keys, including their vulnerability to theft and interception through malicious online attacks. MPC implements a decentralized architecture, exploiting secure algorithms to sign blockchain transactions without referencing full private keys. Unique private key fragments or segments are formed simultaneously and in isolation. They are then encrypted and distributed to different parties. Using a system called Zero Knowledge Proof, key fragments can secretly communicate information, without the risk of revealing the real information. The application of MPC technology represents an important step to improve security against external and internal attack vectors, which has huge implications for the future of cryptocurrencies. With the total cryptocurrency market capitalization having crossed €1 trillion for the first time, it is clear that interest in investing in the crypto asset space has increased alongside the development of a more robust and sophisticated technology infrastructure. .