There are different kinds of cold wallets but I’m only going to focus on the hardware variety. A hardware wallet is a physical device that is kept offline but has the ability to be plugged into a computer when needed. Hardware wallets are safe because when you make a transaction, they ask you to confirm each one by pressing a button on the device. They are pretty much hacker-proof. At least I’ve never heard of any being hacked before. They do feel magic because I don’t know how they are programmed.