Hackers around the world work 24/7 trying to seize cryptocurrency. Hardware wallets provide an added layer of security to protect your cryptocurrency. If you hold cryptocurrency, you should seriously consider using one.
Hardware Wallets Are the Secure Solution
A hardware wallet is a small device that serves the same purpose as that bulky leather wallet in your back pocket. They are an efficient way to secure your money and transport it anywhere, anytime.
There are different ways to store your cryptocurrency. Each varies in security. Cryptocurrency can be stored on the exchange they are bought on, like Coinbase. But this is the least secure. They can also be held in a digital wallet, like Atomic Wallet, which is a little more secure. But the most secure way is to keep your cryptocurrency on a hardware wallet.
A hardware wallet looks similar to a USB flash drive. Hardware wallets store your private keys. Private keys are a series of a dozen or so random, unique words used to protect one’s cryptocurrency. If someone gets a hold of these words, they have access to all of your assets.
Unlike digital wallets, your cryptocurrency isn’t actually stored in a hardware wallet. Only the private keys are kept. When using a hardware wallet, users interact with the blockchain itself.
For example, if you want to send or receive Bitcoin with your hardware wallet, your wallet accesses the Bitcoin blockchain with your private keys. Whether it is Bitcoin or Dogecoin, the hardware wallet connects with that specific blockchain directly. Those private keys unlock your funds that are technically stored on the blockchain.
Digital wallets and exchanges are only intermediaries between you and the blockchain. If you want to ensure that your money is always in your custody then use a hardware wallet.
Disadvantages of Hardware Wallets
There are a few disadvantages of a hardware wallet. Just like the wallet holding your credit cards and cash, it is important to keep it safe and in a known location. There are ways to recover funds if a hardware wallet is lost but it is best to avoid that situation altogether.
Learning curves are something inherent to cryptocurrency and the same goes for using hardware wallets. They can take a little getting used to.
Unlike digital wallets that are free to download on smartphones, hardware wallets do cost money. They range in price from around $40 and can go up to a few hundred dollars. The extra cost should be viewed as an investment to ensure your hard-earned cryptocurrency is safe and sound.
Some investors trade cryptocurrency by the hour. It is difficult to trade at this frequency when using a hardware wallet. In order to do this, cryptocurrencies must be held in a digital wallet or exchange. Hardware wallets also don’t have the ability to earn rewards staking cryptocurrency.
Find the Hardware Wallet For You
As mentioned before, there are a variety of hardware wallets at different price points. Some of the most popular brands are Trezor and Ledger. These wallets have built a reputation for being easy to use and extremely secure. Some even have apps for smartphones to view and manage funds.
Hackers will continue to devise fraudulent attacks. And they will likely get more creative and vicious. Cryptocurrencies stored on exchanges are not safe. Digital wallets are a little more secure, but hardware wallets offer the most advanced layer of security for your hard-earned coins. The extra time and effort will help ensure that only you have access to your cryptocurrencies.