The act of storing cryptocurrencies in devices or systems connected to the internet.
Online storage refers to the storage of private keys of a crypto account and the funds contained within in an online device or server, which maintains a constant and continuous connection with the internet. Online storage devices provide easy accessibility and convenient usage, but they also make it possible for attackers to access the device, giving them the ability to steal crucial and sensitive information.
However, they remain a popular way to store assets for new users thanks to their user-friendly interface. In addition, they can allow faster operations and more features on-the-fly as compared to offline storage devices.
While online storage is convenient, it is less secure than offline or cold storage, in which data is kept on devices like hardware wallets that have no active connection to the internet and therefore cannot be remotely hacked.
Online storage devices remain connected to the internet most of the time, not only when a transaction has to be sent to the network, which increases the time window for attackers to penetrate. They may go offline when a user shuts them down and or turns off their internet connection.
Fortunately, online storage devices and servers are still protected by encryption and other security measures. They include browser-based wallets like MetaMask, mobile-based wallets like Enjin and Trust Wallet, and PC/Laptop-based online wallets like Coinomi and Coinspot.