ℹ️ What is a Hardware Wallet?
A hardware wallet is a physical device for securely storing your cryptocurrencies offline.
Important: A hardware wallet does not store your cryptocurrencies themselves, but only the private keys that give you access to your digital assets.
Due to their offline nature and additional security features, hardware wallets are considered particularly secure and are often used for long-term storage of cryptocurrencies.
Understanding Hardware Wallets
A hardware wallet usually looks like a USB stick and belongs to the so-called cold wallets. These devices are not connected to the internet and thus offer an additional level of security, protecting against software vulnerabilities and online attacks.
How Does a Hardware Wallet Work?
As mentioned, hardware wallets do not store the cryptocurrency itself, but your private keys. These private keys consist of unique combinations of numbers and letters and serve as a digital signature or password for your crypto holdings.
Every crypto wallet works with two keys: a public and a private one. The public key is comparable to a bank account number and can be shared without worries. The private key, on the other hand, is like your ATM PIN – it should be kept strictly confidential.
Hardware Wallet vs. Software Wallet
Software wallets (hot wallets) offer user-friendliness and are always online, but this also makes them vulnerable to hacker attacks. Hardware wallets, on the other hand, provide much greater protection due to their offline storage ("cold storage") and therefore significantly minimize the risk of hacks and theft.
How to Use a Hardware Wallet
- Connect your hardware wallet to a computer or smartphone.
- Enter your PIN to unlock the wallet.
- Follow the instructions to manage, receive, or send your cryptocurrencies.
- Then disconnect your wallet from the device and store it safely offline.
What Should You Consider When Choosing?
Most hardware wallets support common cryptocurrencies like Bitcoin (BTC), Ethereum (ETH), and stablecoins like Tether (USDT) or USD Coin (USDC). When choosing, you should consider price, features, and supported cryptocurrencies. Always buy your hardware wallet directly from the manufacturer or from officially authorized resellers to ensure maximum security.
