Cold storage is storage of BTC private keys that are not connected to any live computer. Therefore anyone who would hack your live computer systems could not steal the cold storage BTC just by a remote hack. They would have to physically break into whatever location contained the keys, and then circumvent any encryption-in-rest that you had wrapping those private keys.
You can also split up control of the keys with multisig, so multiple keys have to come together to move the BTC.
Since most financial institutions only have small fraction of their balance needed to cover their money inflows and outflows, having most of your BTC in cold storage is a best practice.
You can also split up control of the keys with multisig, so multiple keys have to come together to move the BTC.
Since most financial institutions only have small fraction of their balance needed to cover their money inflows and outflows, having most of your BTC in cold storage is a best practice.