This concept relates to how one’s cryptocurrency is stored. If the currency is online, on an active drive that is turned on, or accessible through cloud computing, it is also accessible to other computer users. That access can take place without the knowledge of the holder of the cryptocurrency. This can lead to hacking and theft since cryptocurrency by design is not connected directly to any one person. As such it is important to maintain unique currency information offline as often as possible and to do so always except when the currency is directly in use for a transaction. Two of the best ways to keep currency information offline is to store it in an external drive that is disconnected from any computer when it is not needed or to print it out or store it in a paper wallet. If using a wallet service of a cryptocurrency exchange, it is advisable to determine whether the information is stored offline. Digital currency theft is usually untraceable and irreversible.
Malone, J.A (2015). Glossary of Bitcoin Terms and Definitions. United States: Lulu Press, Inc