What to Know About Hardware Wallets

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Killer Whale Crypto

July 25, 2021, 6:04 AM UTC

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This article describes the benefits of hardware wallets and why crypto holders should own one

Hardware wallets, or cold wallets have been around for quite some time, relative to cryptocurrency. They offer the highest level of security, compared to every other crypto storage solution, because they are not connected to the internet when they are not in use. In fact, most hardware wallets must be physically plugged into a computer, to access the stored crypto on the device. In this article we will discuss how hardware wallets work and which hardware wallets are recommended right now.

What is the Difference Between a Hardware Wallet and a Flash Drive?

Hardware wallets may resemble USB memory sticks, or external hard drives at first glance. Flash drives and hardware wallets do in fact share many similarities. The difference between hardware wallets and flash drives, is that hardware wallets are far more secure. After all, hardware wallets are built and programed to be the absolute safest storage solutions for cryptocurrency.

A flash drive can be used to keep cryptocurrency in cold storage, however, it is not a good idea for a plethora of reasons. First, the memory on a USB flash drive will deteriorate over time. If left unattended for long periods, any cryptocurrency keys being stored on a flash drive may become too corrupted to use. If this happens, your cryptocurrency keys are useless and the crypto is essentially gone. Furthermore, some flash drives are highly susceptible to water damage and damage from dust particles, which would also render any cryptocurrency keys stored on the device useless. The security of your cryptocurrency on a USB flash drive, when it’s plugged into the computer is the greatest concern of all. Simply put, flash drives are not meant for cryptocurrency.

Hardware wallets on the other hand, are protected by a variety of different security measures; both physically as well as within the software of the hardware wallet itself. The most important feature of a hardware wallet is that your private key is stored directly inside the device itself. That means no typing it out on the keyboard, or copy/pasting it to authorize a transaction. When transacting cryptocurrency between two wallets, using a plugged-in hardware wallet, the security key is entered by pressing a physical button on the hardware wallet itself. This keeps your private key completely secure from hackers using keylogger software to copy your keystrokes. With a hardware wallet, you will never see your private key, nor will you ever type it.

Finding the Right Hardware Wallet

No matter what, any reputable hardware wallet, bought from a reputable supplier, is going to be a secure option for storing your crypto. There are a variety of hardware wallets on the market to choose from. Hardware wallets come in many shapes and sizes, at all sorts of price ranges. Modern hardware wallets usually come with other additional features, such as the ability to sync your hardware wallet to an associated cloud-based wallet, in the same way one would utilize a savings and a checking account. Utilities like this are a nice convenience, but what it really boils down to is picking the correct hardware wallet for your level of experience, as well as your preference on how many cryptocurrencies you are planning on keeping in cold storage.

Best Hardware Wallet Companies

ColdCard BTC Only Wallets -- If top-notch security is your highest priority, ColdCard is at the top of the list. ColdCard offers the following features, which are all completely optional

  • A 13 attempt login feature

  • A “Brick Me” PIN: which the user inputs to fry the security element of the device, making it inoperable in the event of a physical attack. The crypto can then be recovered using your “seed words”

  • A “Duress” PIN: which opens a new wallet, with a minimal amount of funding. In the event of a physical attack, you may only end up parting with a small amount of crypto. Somewhat like carrying an extra wallet with a few dollars in it, to keep your regular wallet safe in the event of getting mugged.

  • Ledger Hardware Wallets -- Leger wallets fantastic for the price, they are lightweight and so far, un-hackable. Keep in mind however the Leger company itself was hacked in July of 2020, exposing the email addresses, telephone numbers and names of 272,000 customers, although no cryptocurrency was lost as a result of this. Leger wallets offer the following features:

  • Leger supports 1,500 cryptos, across 3 to 6 application platforms

  • Ledger is the original hardware wallet company

  • Ledger hardware wallets are less expensive than most, ranging in price from $60 to $120

  • Trezor Hardware Wallets -- Trezor wallets take the cake for ease of use, as well as the number of cryptocurrencies they support, although they do come with a slightly higher price tag than that of the competition. Trezor wallets offer the following features:

  • Trezor is the most user-friendly wallet on the market

  • Trezor supports over 1,600 cryptocurrencies

  • Trezor hardware wallets integrate seamlessly with the Exodus wallet.

  • Hardware Wallet Safety

    When picking a hardware wallet, it is always important to keep a few things in mind. First, always buy your hardware wallet from a trusted source. Wallets purchased directly from the manufacturer are your safest bet. Second, avoid buying a hardware wallet from a company you just heard about yesterday: Do your own research before you entrust your cold storage to a specific brand. Lastly, the less people who know about your hardware wallet, the better. That being said, Picking out new gadgets is always fun! I wish you all luck in picking out the right hardware wallet for you!

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