Part 5/8:
Paper wallets: A printed or handwritten representation of private keys or seed phrases.
Offline hardware wallets: Devices that are disconnected from the internet when not in use and are solely used for storage.
The key characteristic is that cold wallets are not used for active trading or interacting with smart contracts—they are dedicated to offline storage. This limited functionality drastically reduces the surfaces for potential errors or scams.
The Critical Distinction
The crux of the difference lies in usage and interaction: