Cold storage was innovated by the Armory Bitcoin wallet. Armory provide a first-of-its-kind interface for easily managing offline wallets for true cold storage. You can create your wallet on a computer that never touches the internet, yet still manage the wallet from an online computer with minimal risk of an attacker stealing your funds.
Using cold storage by keeping all the private-key data on the offline computer, only someone with physical access to the offline computer can steal your Bitcoins. And even if someone physically stole your offline system, it might take centuries for them to get through the advanced wallet encryption! There is just no safer way to manage large sums of Bitcoins, and there is no simpler way to achieve this level of security than using Armory!
Armory offline wallets give you the convenience of a normal wallet for receiving Bitcoins and verifying payments, while giving you the ability to spend them in the simplest way possible. When you want to spend bitcoins in cold storage, or in other words, from an offline wallet, then Armory provides an intuitive interface with clear directions. It does not require synchronizing the blockchain with the offline computer, and does not require any data on the offline computer except for the Armory software and your wallet file.
Dedicated Bitcoin Cold Storage Laptop
If you are holding thousands of dollars worth of Bitcoins, it could be worth purchasing a low-end netbook just for this cold storage purpose! Something like the Eee PC from Asus costs between $200 and $300 but is usually worth the investment if you have a lot of Bitcoins. Many people have old laptops laying around. Craigslist and eBay are also good options for getting an inexpensive, used laptop. Anything with 256 MB of RAM will work.
When you create an offline wallet and use a watching-only copy of it on an online computer, here’s what capabilities each one has:
You generate a wallet on the offline computer the same way that you do on an online computer. This makes sure your Bitcoin private keys are in cold storage. You then make a “watching-only” copy of that wallet to be used imported on the online computer. Using this watching-only wallet, you can generate addresses and monitor payments exactly the same as any other wallet. In order to send money, you will be doing the following:
Create unsigned transaction (online).
Sign it (offline).
Broadcast it (online).
With a little practice, you will be executing offline transactions from cold storage completely securely, in less than one minute! Until then, the interface is loaded with instructions and descriptions of what you are doing, at every step. If you need additional help, you can aways check out our tutorial.