What is a hardware wallet?

Last updated: 13 Apr 2021  |  16172 Views  | 

What is a hardware wallet?

Why do I need a Hardware Wallet?

 



Usually, if we use digital coin trading services through various exchanges such as Bitkub, the purchased coins are stored in the software wallet belonging to that exchange, while the private key that is the key to access that wallet is stored on the exchange, for example. Preventing using a software wallet is suitable for short-term investors. Because you can trade coins immediately Without having to make any additional settings

In addition to Exchange wallets, there are also available software wallets that are available online such as Exodus, Electrum, and Uphold, etc. These software wallets are always connected to the Internet. Also known as Hot Wallet.

For those who wish to keep their digital assets for a long time, the choice of hardware wallets is the answer. These hardware wallets do not need to be connected to the Internet all the time. Keep it safe from being hacked wallets that are not always connected to the internet. We will call it a Cold Wallet.

In addition, in the early days when Bitcoin was born. The so-called paper wallet was used to note the public key and private key, which was a form of cold wallet, but it was later found that the paper wallets can be decayed and lost quite easily. Therefore, more and more hardware wallets are being developed and used.

Functionality of a Hardware Wallet

Hardware Wallet does not store any digital coins on the device. But it will retain the Private Key while the coin is still on the Blockchain and not disappear. Private Key plays an important role in "signing" transaction data on the blockchain. Such a signature cannot be generated without a Private Key, meaning only those who have the Private Key can move their value on the Blockchain.

In addition, some hardware wallets take measures to prevent theft or loss. The most popular brands are Trezor and Ledger. Nano that will have a PIN Code to verify the identity before use. If lost, there is a Seed Phase or Recovery Seed that can be used to restore the Private Key.

Summary of advantages of having a hardware wallet

1.Easy to carry

Since Hardware Wallets are often as small as a Flash Drive, they are easy to carry or store.

2.High safety

Hardware Wallet doesn't need to be connected to the internet all the time. Making it safe from being hacked In the event of being stolen or lost It cannot be used easily because there is a PIN Code to help lock another step. And the owner can use a Seed Phase or Recovery Seed to recover the Private Key.

3. Collect a variety of coins

New Hardware Wallets can support many types of Wallets' Private Keys. This means that one Hardware Wallet can store Bitcoin, Ethereum, XRP, Litecoin and other coins depending on each hardware wallet model.

4.Suitable for storage.

Although the Hardware Wallet is not as quick and easy as a Software Wallet, it comes in terms of security and durability. Therefore suitable for people who want to buy coins from the trading board And put it aside, wait for the value to go up, and then bring it out to sell, etc.

References: Ledger, Trezor, Decrypt, Investopedia

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