<p>The exchanges that use cold storage keep most of their coins offline, but do have a small percentage of funds that is necessary for normal business in online wallets. </p>

CC BY-SA 3.0
2018-02-03T17:06:55.380Z
2018-02-03T17:06:55.380Z
Tim Nussbaum
<p>They are using a master public key for generating addresses and storing master private key offline. </p>

<p>When you make a transaction, you are not calling to get the master private key directly and signing the transaction. </p>

<p>Someone either processes the transactions manually or following some security checkpoints before signing the transaction.</p>

<p>We can't really know what is going on exactly, but it's just an example.</p>

CC BY-SA 3.0
2018-01-30T18:44:24.850Z
2018-01-30T18:44:24.850Z
Tailer
<p>Some exchanges mentions they use a cold wallet to keep the private key. As far as I understand cold wallet is a wallet either in an offline machine or kept in hardware.</p>

<p>However, it appears that transfers can still be made online on these exchanges and the underlying system will automate the signing of transaction.</p>

<p>How do exchanges able to maintain a cold wallet while still able to automate the process? Is it by setting up local network with limited access or by other means?</p>

<wallet><exchanges><coldstorage><wallet-security>
How do exchanges use cold bitcoin wallet while still able to automate transfers?
Calvin Lau
# How do exchanges use cold bitcoin wallet while still able to automate transfers?

(Asked by: username_0 on 2018-01-30)

Some exchanges mentions they use a cold wallet to keep the private key. As far as I understand cold wallet is a wallet either in an offline machine or kept in hardware.

However, it appears that transfers can still be made online on these exchanges and the underlying system will automate the signing of transaction.

How do exchanges able to maintain a cold wallet while still able to automate the process? Is it by setting up local network with limited access or by other means?

**Tags:** wallet, exchanges, coldstorage, wallet-security


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## 2 answers

### Answer by username_1 on 2018-02-03. Score: 1

The exchanges that use cold storage keep most of their coins offline, but do have a small percentage of funds that is necessary for normal business in online wallets.


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### Answer by username_2 on 2018-01-30. Score: 0

They are using a master public key for generating addresses and storing master private key offline.

When you make a transaction, you are not calling to get the master private key directly and signing the transaction.

Someone either processes the transactions manually or following some security checkpoints before signing the transaction.

We can't really know what is going on exactly, but it's just an example.


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