The security of our cryptocurrency funds is not something to be taken lightly, and that is why hardware wallets have been created. These are physical devices designed to offer the greatest possible security to our funds at all times.
Ahe moment to consider the safety and security of our cryptocurrencies, one of the most reliable options are Hardware Wallets. These little devices allow safeguard and protect our private keys on a physical device designed specifically for this purpose.
Here we will give you a broad explanation of what they are, how they work, what are those that exist in the market and what characteristics do they possess. And as an extra, We will give you some recommendations for use so that you get the most out of this wonderful technological innovation.
What are Hardware Wallets?
Hardware wallets, They are physical devices that operate as wallets without an Internet connection and keep private keys stored securely within them. This is what is known as Hardware Wallets, which are also part of the Cold wallets due to their cold storage condition, as they do not remain connected to the blockchain or the internet.
They are devices specially designed for this purpose, small units HSM (Hardware Security Modules) with military-grade security that allow you to generate private keys and that they never leave the device. Furthermore, if the device tries to be physically manipulated with the aim of accessing its private keys, it will "suicidal”Completely eliminating the keys.
These represent one of the safest and most comfortable options on the market for cold storage of large amounts of cryptocurrencies. This due to the fact that they protect the security of the private keys within themselves but allow them to be used comfortably, usually via USB. Most of them use a kind of security chip where the keys are retained and can never be transferred outside the device.
Functions of hardware wallets
Hardware wallets only have two main functions:
Generate private keys.
Sign with those keys a content that is sent to you.
In this way, the private key never leaves the device for a second. They usually have a screen that allows you to verify what you are authorizing to sign to avoid hacks due to interception of the transaction.
They are compact and portable, so they can be carried anywhere or kept in a safe place. To manage your cryptocurrencies, you only have to connect them to a computer or smartphone through a USB port, enter your password and make your shipments. In the device we are using, software is required to manage them. Then, when you disconnect the wallet, it automatically turns off.
The level of security offered by these devices is very high and reliable. The operations validation process is performed within the same hardware device and not on the computer or smartphone to which they are connected. So an operation can be signed without the need for private keys to leave the device.
Characteristics of hardware wallets
Its immune to virus and malware attacks which can infect the device and steal private keys. So they allow the storage of large amounts of cryptocurrencies safely and efficiently.
Absolute control over private keys, and therefore, of funds, is owned by the user. So that no trust in third parties is required for the management of the keys and the management of cryptocurrencies; as it happens with online wallets or hot wallets.
The private keys are generated randomly and without patterns through a Random Number Generator (RNG).
Hardware wallets usually have limited media, with which they seek to maximize security.
The software of the hardware wallets are open source mostly. This allows the user and the community to validate how they operate and verify the security processes they implement.
Also the hardware wallets allow to add extra layers of security. For example, the choice of PIN configuration or 2-factor authentication (2FA). These methods prevent a third party from using the device in the event of theft or loss.
Keys are generated and maintained within the same hardware device. They never go out to the computer. So they are kept safe and protected.
Its compatible with most operating systems availables.
have a seed that allows to restore the keys and recover the funds.
The acquisition of hardware wallets requires a certain investment. There are devices ranging from € 50 to € 200 or more. However, considering that their acquisition is intended for the safekeeping of large sums of money, it really is a small investment, don't you think?
Recommendations for use for hardware wallets
When configuring a hardware wallet for the first time it is recommended make a written backup of the seed or keywords. Since several of them show the seed only once.
The seed backing should be kept in a safe and protected place. since if damage or loss occurs, it will be impossible to restore a wallet and recover its funds.
The seed endorsements they should never be done inside the computer or other device without being encrypted and encrypted first. Since these devices are prone to hacking and cyber theft.
If you are going to buy a hardware wallet, be sure to buy it from its official suppliers and not from markets or third parties. This is because there are many possibilities of hacking, theft and scams if the necessary precautions are not taken.
How much do you know, cryptonuta?
Can the security mechanisms of hardware wallets be easily broken?
While ultimate security doesn't exist, hardware wallets are one of the closest things to that concept. They were created from start to finish to offer the greatest security and the greatest guarantees to keep our funds safe. And while there are ways to break this security, these methods are not easy and you need advanced technical knowledge and direct access to your wallet to do them. So you can rest easy knowing that your funds are safe.
Examples of hardware wallets
As we already mentioned, they are easy to use devices that take the form of a USB portable hard drive. Currently there are several brands available in the market, but there are 3 major companies in the world of cybersecurity that are at the forefront in the development of these devices. Let's see which are the most reliable and most widely used.
The first physical wallets were developed by the company Safe deposit, which has an excellent reputation in the field of computer and security. Trezor wallets are physical devices that provide secure storage of private keys. It is also a deterministic wallet (HD), so it can generate an unlimited number of addresses starting from the seed.
Your system is compatible with Android, Windows, Linux and OS X, and when you configure it for the first time, it displays a seed of 24 keywords generated by an RNG without internet connection. This guarantees that the seed will never be in another device. Thus, this device creates an ideal isolated environment to execute the signing of transactions offline. So it significantly reduces the chance of your private key being discovered, even if the device you connect to is infected or compromised.
Among the versions of this company are: Safe One y Trezor T. Both devices with a friendly design and a very easy and simple to use user interface that support a large number of cryptocurrencies, except for Ripple (XRP).
Another company that offers us a variety of options in terms of physical wallets is Ledger. Among his designs we find several devices such as Ledger Nano S , Ledger Nano X. There is another version, although it is no longer manufactured which is Ledger HW.1.
At the heart of their designs is an operating system called BOLOS in a security chip. This operating system is very powerful and flexible, allowing Ledger to safely run multiple open source applications in complete isolation. Ledger wallets are compatible with Windows, macOS, Linux, iOS and Android operating systems. Access to the wallet is made from the Ledger Live application, which allows control of the devices to send and receive payments when you want, in addition to checking their balances.
They admit around 22 cryptocurrencies and over 1250 ERC20 tokens. For his part, like Trezor, you can configure a PIN or password of your choice, but if 3 failed attempts are made, all the information inside the device is erased. The generated seed contains 14 keywords, and the keys are protected in an internal chip resistant to computer attacks. Its value varies depending on the model and ranges from € 50 to approximately € 200.
The Nano S and Nano X versions are compact sized smart cards very similar to a USB flash drive, which connect via USB to the computer to manage assets.
The company KeepKey Founded in 2015, it created a USB device with characteristics similar to Trezor One and Ledger Nano S to store and manage its cryptocurrencies. It has fairly high levels of security, and the generated private keys never leave the device. Like previous wallets, KeepKey is protected by a PIN configured at choice, that every time an incorrect one is entered, the waiting time increases.
When configuring it, it issues a seed of 12 keywords, and employs a feature known as recovery encryption It encodes and mixes the letters of each keyword, giving you greater security and confidence. KeepKey supports operation with more than 40 cryptocurrencies, and must be connected with the KeepKey Chrome app to work. Its value is between € 40 and € 80 per unit.
Additional wallets available in the market
A hardware wallet designed in conjunction with Ledger to work especially with your Blockchain wallet. Although it is not compatible with Ledger services such as Ledger Live.
Its design allows it to work without the need to download software, and it also offers a dual-chip architecture that guarantees cryptographic protection. Like the previous ones, this wallet allows you to configure a PIN by lesson to increase the protection and safety of your assets.
The wallet Archos Safe-T Mini It has a circular design and is a hardware type wallet that operates off-line and keeps your private keys away from hackers through cold storage. It is one of the safest solutions to protect your cryptocurrencies.
The wallet is easily connected to a computer or smartphone using a micro USB cable. A unique PIN of up to 6 digits can be configured to give your wallet greater security and protection. It also has a recovery seed, so you can restore your wallet in case of damage or loss of the device. Like the previous wallets, the transactions must be confirmed manually using the buttons it has, and through an LCD screen the user can verify the data before signing. It has support for more than 12 cryptocurrencies and ERC20 token.
Bit2Me Wallet, a secure wallet for your cryptocurrencies
The security of your cryptocurrencies is paramount and for this reason, hardware wallets are the best option to protect your funds. At Bit2Me we understand this and we recommend using a hardware wallet if you want to store a large amount of funds and keep them safe. However, you use a hardware wallet for your day-to-day payments like paying for a coffee or a purchase in the store, it is quite a complex job. For this reason and knowing that your main concern is security, we have created Bit2Me Wallet.
With Bit2Me Wallet you can keep your cryptocurrencies safe and have a wallet to make these small payments quickly and easily. Pair Bit2Me Wallet with your preferred hardware wallet and create the best team to manage your crypto portfolio without problems. You can open your wallet for free and in just 20 seconds, clicking here.