Before you can get to own and use Bitcoins, you need to have an e-wallet that will not only enable you to store your precious coins but also make it possible for you to use them in making transactions. There are various kinds of digital coin wallets. The two main categories are the digital and physical wallets. We want to check out the physical wallets, particularly the hardware wallets, and why you should consider using them to store your coins
What is a hardware wallet?
Well, a hardware wallet is a small computerized device or smart card that manages your private keys. They are offline devices, which makes them some sort of a cold storage option for storing cryptocurrency.
These hardware wallets are run from your computer through their own Apps, the connection is usually done through a USB cable from the computer. All you need to do to get the device ready for use is to install the app, set up your security and come up with an encryption code.
You might find that hardware wallets are better in several ways to most other options like mobile wallets and web based wallets. Here are some reasons you should consider using hardware wallets.
Hardware wallets are safer
The fundamental principle behind the idea of hardware wallets is a complete isolation of your private keys or cryptographic codes from internet-enabled devices like mobile phones and personal computers which can be hacked quite easily. We all know how vulnerable PCs and mobile devices can get. In comparison, paper wallets are quite secure until you factor in that you have to import your private keys to your computer whenever you want to use your coins. You may think that password encryption is enough but boy, have you considered that there is malware smart enough to sit snug waiting for the compulsory decryption phase and sweep all your coins?
Paper wallets are only good when they are complimentary to hardware options, i.e. as a means of back up from where you can go to quick recovery in the event of a loss.
Hardware wallets themselves generate the private keys, which make them invincible to the malware or thieves. Some of the hardware wallet devices provide a unique way of entering the PIN, which deters keyloggers from being capable of recording it. It is also possible for you to setup an encryption passphrase in addition to the standard PIN protection.
Immune to virus attacks
Hardware wallets are not susceptible to malware attacks. They are secured by higher levels of encryption in addition to the fact they are completely isolated to online affairs. Wallets that require you to download an application may succumb to attack from viruses or other malware and spyware. As long as all the security measures are well implemented, then a hardware wallet will be completely secured at all times. You can actually use some of the hardware options like Trezor on a virus infected computer without the fear of leaking even a single key. The strong point of the construct of these hardware wallets is that transaction signatures are performed on a separate device that is restrictive on command prompts that can be intercepted by the computer’s central processing unit.
They are portable
Hardware wallets are very portable and therefore can be carried along to whatever destination. This way you minimize chances of tampering or being destroyed by irresponsible individuals. What this also means is that you can access your private keys anywhere in the world from your most secure storage. All you will need is a compatible device like a computer and you are good to go.
Hardware wallets are more reliable than any other type of wallets. For instance, when using TREZOR, once you have initialized the device, it generates a recovery key. The beauty of this is that all the contents of your device can be restored using another TREZOR device or a compatible wallet with a recovery seed. This comes in handy in the event your device gets lost or destroyed.
The fact that you don’t have to rely on any wallet service providers makes hardware wallets even more reliable and convenient. Wallet providers can be unreliable in more ways than one. For starters, they depend on software, and we all know that software can malfunction anytime leaving you stranded and unable to transact.
Ease of use is the quality of every reliable technology. There is no point having a very complex gadget or idea if you are looking to solve a problem. Hardware devices only need you to connect them to your PC and it will do all the heavy lifting for your cryptography. You can use the gadgets with utmost confidence even on a foreign computer.
There are several hardware wallet options for storing your Bitcoins. It goes without saying that not all wallets are created equal. You have to review several of them and see which one will serve your needs best before you can settle on buying. Currently, Ledger Nano S is the most popular Hardware Wallet. Trezor is also commonly used.