Bitcoin Hardware Wallet
The most secure way to store your cryptocurrencies.
Quick Summary: A hardware wallet is a specific type of (bitcoin) wallet, that keeps the private key in its secure hardware device. The device itself will be signing the transactions.
Overview: Bitcoin Wallets
The technical aspects of Bitcoin can be quite confusing, even for the most seasoned computer programmer, let alone the average person. While it is not necessary to fully understand how Bitcoin works to reap the benefits of its existence, it is paramount that everyone understands what a Bitcoin wallet is, the different types there are and which one is most secure.
Types of Bitcoin Wallets
Before focusing only on bitcoin hardware wallets, we want to display the different options of wallets.
Most people that are just now entering the realm of Bitcoin will, without a doubt, procure themselves a Bitcoin web wallet on one of the various sites that offer the service, and for most, this option will most likely be all they ever need, in regards to Bitcoin storage. However, a few will require something a bit more secure.
There are four options available in the world of Bitcoin wallets:
Bitcoin web wallet
To start, we have the aforementioned Bitcoin online wallet, which is basically allowing a third party website (and its owner’s) to create and potentially hold the bitcoin for you, giving you access to it via their web interface with a browser of your choice.
Bitcoin software wallet
Next, we have what is called a software wallet, which is basically creating and storing the bitcoin private key on your own device.
This software is installed on your computer.
Bitcoin paper wallet
Next, we have what is called a paper wallet, this way of storing Bitcoin is seen as a very secure one. The problem is that the coins are very inaccessible if one decides to use them. To use them, he needs to connect his private key with a software or online wallet.
This paper wallet is randomly created by even throwing dice.
Bitcoin hardware wallet
Lastly, and the topic of this page, the hardware wallet, which is the most secure and safe way to store your Bitcoins.
The keys are stored on a specialized, small and portable computer device.
Bitcoin Hardware Wallets: The Vaults that keep your BTC protected
Bitcoin Hardware wallets are standalone devices that hold your bitcoins for you. They are an offline, or “cold” storage wallet option for those who need a little-added security.
If you have a large balance or conduct several transactions daily, a hardware wallet is definitely the choice you should make for your Bitcoin wallet needs. With a hardware wallet, there will still be the need for a third party website or software to access your balance and conduct transactions.
The goal of everyone, who holds Bitcoin, is to keep their Bitcoins secured at all times, and what better way than with your very own personal vault?
How does a Bitcoin Hardware Wallet function?
The characteristics of a Bitcoin hardware wallet are that the private key is created and stored only in this device. This means that to sign a transaction, you will need to connect the device to your computer.
Essentially, that is all a hardware wallet is; a personal vault. Albeit, it is small, compact and usually fits in your pocket, but it is a vault none the less.
Your wallet address that you give out to your friends, customers and other potential transaction partners is essentially a public key that allows the transaction between two parties to occur.
The thing that keeps your bitcoins safe and secure is the private key. If you have the private key to a wallet, you have the bitcoin within that wallet; plain and simple.
You can read more (and watch a video) about the bitcoin private key, here.
Danger – when not storing your BTC at a hardware wallet
Storing your Bitcoins in a Bitcoin online wallet means that you trust the owner of the wallet website. He might steal your private key data or get hacked and lose it. Software wallets on your desktop are vulnerable to malware and viruses that wish to find and steal the private keys, and your Bitcoins. A hardware wallet takes both of these security risks out of the equation.
Your private keys are stored on the device and only on the device with no reason to ever come off of the device. They also include pin numbers, passphrases and other security-minded features that make it near impossible for anyone to ever get their hands on your Bitcoins.
Your bitcoin will be safe when it is locked away in a device that is not meant to transfer the private keys out of the device. Hardware wallets are truly Bitcoin vaults.
Pros on using a Bitcoin Hardware Wallet
Remember, there is no bank to call if someone steals your Bitcoins. The transaction happens between you and the other party directly, with no middle men. So if your Bitcoin wallet is compromised or stolen, you will most likely never see those bitcoins again.
Safety and security should be the first goal of anyone who trades, deals in or otherwise holds a Bitcoin balance. By ensuring that your Bitcoins are securely stored on a hardware wallet device, you can ensure that you will not lose your Bitcoins to the myriad of predators who are just waiting for an opportunity to sink their teeth into your balance, leaving you broke with nowhere to turn to for help. Hardware wallets are the solution to the ever-present dangers of bitcoin thieves, scammers and con artists.
Cons on using a Bitcoin Hardware Wallet
While they may be safe, secure and the best choice for storing your bitcoins, hardware wallets can present a serious downside: if you ever lose access to your seed key , you essentially have lost your Bitcoins just as if someone stole them from you.
It is important to securely store the seed, offline mind you, and have a way to access it at all times in a location different than where you will be keeping the hardware wallet. Using some prudence and a bit of common sense can help you to enjoy the world of Bitcoin, while being safe and secure the entire time.
Make sure to get information about any wallet considerations you are thinking about pursuing. Ask questions, be absolutely sure that you understand those options and everything you need to know before committing yourself to a particular device. This will help to ensure that you are fully utilizing your hardware wallet and that it is set-up in the most optimized configuration.
Back-up all of your security information, test the device and then, and only then, can you rest assured that you and your Bitcoins are safe from outside dangers.
Best Bitcoin Hardware Wallets at the moment:
We believe that one should invest 10% of his capital in security. Thats why we bought ourselfs one of the best bitcoin safes: the Trezor