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Cryptocurrency industry has been growing at an exponential rate these days and with this type of growth and adoption it is crucial to protect your coins and store them more securely. There are a lot of wallets that can store your crypto but below I am focusing on hardware wallets and why you should consider getting one?
What is a hardware wallet?
A hardware wallet is a physical device built for the sole purpose of securing cryptocurrencies. You connect it to your computer by USB, and then you can send coins from your crypto wallet without ever being connected online.
How to hardware wallets work?
Let’s say you want to send a Bitcoin transaction using a hardware wallet. The first thing to know is that because a hardware wallet is such a simple device that can only sign transactions, it needs to use a more complex computer for all other functions, such as preparing the transaction and broadcasting it to the network. So, in order to use a hardware wallet, you’ll need to connect it to your personal computer and download a program that can communicate with it. I’ll call this program a bridge, and the bridge allows you to prepare your transaction for signing. Hardware wallets allow only very specific types of data to pass through to it, such as cryptocurrency transactions. Once a hardware wallet receives a transaction from the bridge program, it signs it on the hardware wallet itself and then sends it back to the bridge program. Your private key never leaves the hardware wallet. The only thing that gets transferred between your computer and the hardware wallet is the unsigned and signed transaction. Because of its minimalistic and simple design, a hardware wallet can be used with any computer without fear of being hacked or infected – even a public library computer.
Why should you get a hardware wallet?
A software wallet can be good for beginners as they are free of cost but leaving your funds on an exchange or in a software wallet can leave you vulnerable to hacks and various other types of attacks. Software wallet tend to be drained of funds via malware attacks and exchanges tend to get hacked sometimes and not even BINANCE was able to avoid being hacked, even though they reimbursed every penny of the stolen funds its better if you never get hacked in the first place.
Hardware wallets are considered the safest way to store your crypto because your private keys never leave the wallet and due to this hardware wallets can be used in any devices (including the computers is a library) without worrying about security.
Points to consider while choosing a hardware wallet
- Security: Although hardware wallets are the safest option out there, some are more secure than others.Coins supported: All hardware wallets will store BTC, ETH and most other top cryptocurrencies. However, if your portfolio includes some lesser-known altcoins, then some wallets may not be suitable.
- Price: If your portfolio is relatively small then chances are you won’t want to pay top dollar for a device to store it on. As with any product, prices for hardware wallets vary.
One final point to remember when buying a hardware wallet is to always buy it directly from the maker. There have been a few instances of unscrupulous types buying a wallet, extracting the seed words and then reselling the device. When the unsuspecting buyer then loaded their crypto onto it, the scumbags were able to remove their funds using these seed words.
Which hardware wallet is best?
There are various companies selling hardware wallets these days but among them the two most used are TREZOR and LEDGER.
Both hardware wallets are pretty secure but LEDGER suffered a databreach in mid-2020 and information (Home addresses, telephone numbers etc.) of about 272,000 customers got released into the wild. Despite this data breach no crypto assets were hacked as confirmed by the company.
With that out of the way, my personal favorite wallet brand is Trezor because its very simple, easy and supports 1000+ coins which is the most of any hardware wallet and it offers two wallets namely Trezor model T (190$) and Trezor one (59$).
Below are the differences between these two models-
Keep it safe
No matter which wallet you choose remember to keep your seed phrase safe and put in away so that only you have access to those.
Stay Safe
Source - https://www.coinbureau.com/analysis/best-hardware-wallets/
