There are numerous ways to store cryptocurrency, but a hardware wallet is by far the safest. If you are new to cryptos, or just looking for more information about how to keep your cryptos safe, you are in the right place.
A crypto hardware wallet is basically just a dedicated electronic device that is built to store cryptos. There are a few brands out there, with Trezor and Ledger standing out as perennial favorites among crypto owners.
Using a hardware wallet is simple. The major manufacturers have created slick interfaces to make using a hardware wallet easy, and most hardware wallets aren't going to cost you more than $200 USD (some are under $100 USD).
Why Choose a Hardware Wallet for Your Cryptos?
Before we dive into hardware wallets, let's talk about the other crypto storage options that are out there, and why hardware wallets are better in term of safety.
The private key is what establishes ownership of a token. People who use crypto exchanges may not realize that they don't actually own anything! The exchange controls the private key for all the tokens that are deposited, which means that the exchange owns the cryptos.
For people that want to own their private keys, there are really just two realistic options; software and hardware wallets. There are also paper wallets, but they aren't really a good solution for crypto owners who want to use their cryptos on a regular basis.
The Software Wallet
You may be using a software wallet at the moment to store cryptos. There are some great free software wallets out there. A software crypto wallet uses an existing device you own (usually a smartphone or computer) to store the private keys for your cryptocurrency.
The problem is that these devices are almost always connected to the internet. Additionally, the software that runs the wallet is wide open to hackers. There is nothing stopping hackers from taking on a hardware wallet, but the track record of software wallets isn't nearly as good as hardware wallets.
Keep in mind that software crypto wallets can be useful, especially for keeping your discretionary cryptos handy for use. There is an inverse relationship between convenience and security, and software wallets are super convenient when it comes to spending and receiving cryptos.
Why Hardware Wallets are Safer
The first thing that makes hardware crypto wallets a lot safer is the fact they are offline devices. A hardware wallet is plugged into a connected device when it needs to be used, and is otherwise disconnected from the internet.
Hacking something that is offline for 99% of the time is next to impossible, which makes hardware wallets a very poor target for hackers.
In addition to being 'cold storage', hardware wallets are specifically designed to protect your cryptos against hackers. The people at Samsung and Apple do their best to keep your data safe, but when it comes to storing cryptos, mobile devices are just about the worst platform for safeguarding decentralized currency.
In most cases, data doesn't have a unique monetary value. Banks can just create new currency at-will, which isn't the case in the world of cryptos. Data security for cryptos is extremely important, which is why a dedicated, offline device is the safest way to store your cryptos.
How To: Use a Hardware Crypto Wallet
Every hardware crypto wallet will be a little bit different, but the basics will be the same. It is important to buy a hardware wallet directly from the manufacturer, so you can be sure that it is the real deal.
Once your new crypto hardware wallet arrives, you will have to configure it, and download the software component of the interface. It is important to copy down the unique string of words that will allow you to recover your account (recovery code), in case your wallet is lost or damaged.
If you are interested in how some of the most popular hardware crypto wallets work, just follow the links below for lots more information!
Ledger
Trezor
Keepkey
The specifics for any hardware wallet will be unique, but they all work along the same lines. Once you have the device configured and the necessary software on your smartphone or computer, you will be able to easily send and receive all the major cryptos.
Is a Hardware Wallet the Right Choice?
If you have part of your savings in cryptocurrency, it is a good idea to store it on a hardware wallet. Prices for hardware crypto wallets have fallen substantially, and now they can be had for less than $100 USD. There is no better way to keep your crypto safe for the long haul, which should give you peace of mind.
Using a hardware wallet isn't going to be quite as convenient as a software wallet or exchange, but you will be in full control of your crypto assets, and have them locked safely away in an offline device.
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About the author:
Nicholas Say grew up in Ann Arbor, Michigan with a father that read him the Wall St. Journal, though he always preferred picture books to charts and figures. He has traveled the world extensively, and been lucky enough to see how changes happen in real time. He currently lives in South East Asia, where he writes on a number of topics.
Sources
https://cryptomaniaks.com/latest-cryptocurrency-news/beginners/hardware-wallets-the-safest-way-to-store-your-private-keys
https://blockgeeks.com/guides/cryptocurrency-wallet-guide/
https://99bitcoins.com/hardware-wallets/
https://www.buybitcoinworldwide.com/wallets/ledger-nano-s/
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