Online Storage – Crypto Glossary:
Definition: Online storage, also known as online wallet, refers to the practice of storing cryptocurrency private keys and associated funds on devices or servers that maintain a continuous connection to the internet. These online storage devices provide convenient access to digital assets but come with increased security risks, as they are susceptible to remote attacks by malicious actors.
- Constant Internet Connectivity: Online storage devices or servers are continuously connected to the internet, allowing users to access their cryptocurrency holdings at any time.
- Convenience: Online storage offers a user-friendly interface and convenient access to digital assets, making it a popular choice for new cryptocurrency users.
- Security Concerns: While online storage provides accessibility, it is inherently less secure than offline or cold storage methods. The constant internet connection creates opportunities for attackers to breach the security of the device or server.
- Increased Attack Window: Online storage devices remain connected to the internet most of the time, not solely during transaction activities. This extended connectivity window increases the potential for attackers to exploit vulnerabilities.
- Encryption and Security Measures: To mitigate security risks, online storage devices and servers implement encryption and other security measures to protect users’ cryptocurrency holdings. Examples of online storage solutions include browser-based wallets like MetaMask, mobile-based wallets such as Enjin and Trust Wallet, and PC/laptop-based online wallets like Coinomi and Coinspot.
Advantages of Online Storage:
- Convenience: Online storage offers easy and immediate access to cryptocurrency holdings, making it suitable for users who frequently engage in transactions and need quick access to their assets.
- User-Friendly Interface: Online wallets typically feature intuitive interfaces that are accessible to both beginners and experienced users.
- Faster Operations: Online storage allows for swift cryptocurrency operations and provides users with on-the-fly access to various features.
Disadvantages of Online Storage:
- Security Risks: Online storage is inherently less secure than offline or cold storage methods, making it vulnerable to remote attacks by hackers.
- Extended Attack Window: Continuous internet connectivity extends the potential time frame for attackers to compromise online storage devices or servers.
- Dependence on Service Providers: Users of online storage rely on service providers to safeguard their cryptocurrency assets, which may expose them to third-party risks.