A crypto hardware wallet is a physical device designed to securely store cryptocurrency private keys. It is considered to be one of the most secure options for holding cryptocurrency because the private keys are stored offline on the hardware wallet and are therefore not vulnerable to hacking or other forms of cyber attacks.
One of the main reasons why hardware wallets are so important is because they allow you to hold your own private keys, rather than trusting a third party to hold them for you. When you use a hardware wallet, you are in complete control of your cryptocurrency, and you are not at risk of losing it if the exchange or online wallet you use gets hacked or goes out of business.
Examples of high-quality hardware wallets that will certainly protect your crypto assets are the ones made by Ledger, the range that they offer can be seen here https://shop.ledger.com Our own preference from this range is the excellent Ledger Nano X
The recent event of the FTX collapse really highlighted the volatility of this industry by showing that even a very high-profile exchange such as FTX can become insolvent, meaning that people with coins left on the exchange are exposed to that insolvency.
Hardware wallets are also important because they allow you to securely sign transactions offline. This means that you can use your hardware wallet to sign transactions without exposing your private keys to the internet, which reduces the risk of your keys being compromised.
Not your keys, not your coins
The phrase “Not your keys, not your coins” is a saying that is often used in the cryptocurrency community to remind people of the importance of holding their own private keys. It is meant to emphasize the fact that if you do not have control of your private keys, you do not have control of your cryptocurrency.
In the context of cryptocurrency, a private key is a unique, secret code that is used to access and control your cryptocurrency. It is like a password, but it is much more secure and difficult to guess or crack. Your private keys are what allow you to send and receive cryptocurrency, and they are the only way to prove ownership of your coins.
If you do not hold your own private keys, then you are relying on a third party, such as an exchange or an online wallet, to hold them for you. This means that you are trusting that third party to keep your keys safe and to use them responsibly. If something happens to that third party, or if they are hacked or go out of business, you could lose access to your cryptocurrency.
For this reason, it is important to hold your own private keys and to use a secure method of storing them, such as a crypto hardware wallet. This way, you can be sure that you have full control of your cryptocurrency and that it is safe from outside threats.
How does a hardware wallet work?
Hardware wallets work by generating a private key and a corresponding public key using a random number generator (RNG). The private key is stored on the hardware wallet and is used to sign transactions. The public key is used to verify the authenticity of the transaction.
When a user wants to make a transaction, they connect their hardware wallet to their computer and enter a PIN code to unlock it. The hardware wallet then displays the transaction details, and the user can confirm or cancel the transaction using a button on the device. If the transaction is confirmed, the hardware wallet signs the transaction using the private key and sends it to the network for validation.
Hardware wallets also have a recovery feature, which allows users to recover their assets in the event that their hardware wallet is lost or stolen. This is done by creating a recovery phrase, which is a sequence of words that can be used to regenerate the private key. The recovery phrase is typically displayed on the hardware wallet at the time of setup and should be written down and stored in a secure location.
Overall, a hardware wallet is an essential tool for anyone who is serious about holding and using cryptocurrency, and it is an essential part of a secure and safe crypto setup.