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What Is a Hardware Wallet for Cryptocurrency, and Why Do You Need One?
Whether you're new to cryptocurrency or have been around the block a few times, you've probably heard of hardware wallets. But what exactly are they? Why do I require a wallet to store my invisible currency? That's a good question, and the best way to answer it is to look back at a historic year in cryptocurrency.
It's no secret that the cryptocurrency industry is plagued by fraud, cyber attacks, and theft. BadgerDAO was robbed of approximately $166 million in funds in December 2021. Days later, robbers stole approximately $208 million from BitMart. To top it all off, the largest cryptocurrency heist in history (to date) occurred only in August 2021, when Poly Network was hacked and lost a staggering $831 million in investor funds.
Is your heart already pounding?
What is the definition of a cryptocurrency hardware wallet?
Hackers are a major reason why you should take precautionary measures to protect your cryptocurrency. This is why many cryptocurrency investors invest in hardware wallets.
A hardware wallet is a physical wallet (typically the size of a USB thumbdrive) that allows you to store your cryptocurrency offline. By removing your digital currency from the internet, you increase your chances of avoiding cyber attacks in which someone steals all of your hard-earned invisible money.
Every hardware wallet includes a public and private key. To understand what a public and private key are, think of them as a bank account.
A public key is analogous to a bank account number. Anyone who has your public key can transfer crypto to you in the same way that you can transfer funds to your bank account. A private key is analogous to the PIN on your debit card. It's a form of security that prevents unauthorised access to your account, so don't share your PIN with anyone or leave it lying around.
Why do you require one?
Unfortunately, this thriving industry is not as well regulated as it should be.
To begin, you should understand that crypto wallets are typically classified into two types. The first type is a "hot wallet." The term "hot" simply indicates that your wallet is connected to the internet. On the one hand, this implies that any cryptocurrency that is left online is vulnerable to cyber-theft. On the other hand, it's the most convenient way to access your cryptocurrency, and you're less likely to misplace it (more on that later). Hot wallets that you may have heard of include MetaMask and Coinbase Wallet.
A "cold wallet" is another type of cryptocurrency wallet. As you might expect, it essentially means the inverse of a hot wallet. When a wallet is offline, it is "cold," which means it cannot be compromised by hackers. A cold wallet, which is usually in the form of a physical wallet, can, however, be misplaced or lost. Fortunately, your PIN should prevent others from accessing it, and there are a number of backup programmes that will allow you to recover your cryptocurrency if you get into a jam.
Furthermore, if you want to make transactions on the fly, a cold wallet may not be for you. Despite being more secure, you'll frequently need to rely on a USB-compatible computer to get started. Having said that, an increasing number of cold wallets are utilising Bluetooth technology to combat this issue of inconvenience.
Hardware wallets (also known as cold wallets) are the most secure option for storing all of your cryptocurrency. All you need to do is transfer your cryptocurrencies from the exchange to the hardware wallet. Then you can unplug it and store it in your desk or attach it to your keychain to carry it with you wherever you go.
We've handpicked a few hardware wallet options to help keep your cryptocurrency safe.
Picks from our experts
Ledger Nano S
The ideal entry-level hardware wallet for those on a tight budget. This cold wallet is made by Ledger, one of the market's first and most popular hardware wallet manufacturers. Unless you look closely, the Nano S looks like any other SanDisk USB drive. It can support over 1,800 different types of coins and tokens, making it both versatile and knowledgeable. However, it can only hold three coins at once. If you own more than three types of cryptocurrency, you should consider the next product on our list.
Ledger Nano X
The Nano X is a significant step up from the Nano S and is designed for cryptocurrency enthusiasts. This wallet allows you to manage up to 100 coin apps at once, including Bitcoin, Ethereum, and others. Furthermore, the Ledger Nano X includes Bluetooth connectivity, allowing you to access Ledger Live, the "all-in-one crypto ecosystem," on your smartphone or computer without the use of cumbersome cables.
SecuX W10
SecuX is one of the most competitive brands on the market due to its affordability as well as its status as one of the world's most secure hardware wallets.
If you're looking for the best bang for your buck, the SecuX W10 is one of the few options under $100. While most hardware wallets are accessed via your computer, the W10 allows you to do so via its 2.8-inch touchscreen. The SecuX W10 can store up to 500 accounts and all major cryptocurrencies such as Bitcoin, Ethereum, Ripple, and over 1,000 ERC-20 tokens.
This is an excellent choice for those of you who own multiple coins, trade frequently, and want premium security on a tight budget.
SecuX V20
If you want the Bluetooth capability of the Ledger Nano X as well as the touchscreen display of the SecuX W10, the SecuX V20 offers the best of both worlds at an affordable price.
When comparing the SecuX W10 to the V20, the W10 falls short due to its inability to connect to your smartphone. So, if you prefer to monitor your cryptocurrency on a larger screen, this model is for you.
BitBox02
BitBox isn't as well-known as some cryptocurrency wallet brands, such as Ledger, but it performs just as well and is an excellent first hardware wallet for new investors. All you have to do is instal the BitBox app on your device, configure it, and you're ready to go. It even includes a Micro SD card that can be used as a password-free backup. This means you won't have to write down a seed phrase, as most crypto wallets require. Of course, you can still set one up if you want to.
The BitBox02, on the other hand, is limited to only three blockchains — Bitcoin, Litecoin, and Ethereum — but that's fine if you're just interested in dipping your toe into the crypto market to diversify your portfolio.
Wallet accessories for your hardware
If you decide to go with a Ledger, you should get one of these protective pods. They resemble a mini drink bottle and are simple to attach to your keyring, making it less likely that you will misplace or break your wallet.
If you prefer something a little bulkier, this protective case for the Ledger Nano S is a good option. This one is more of a hardshell case that will keep your Ledger secure and comfortable.
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By Crypto PiratesWhether you're new to cryptocurrency or have been around the block a few times, you've probably heard of hardware wallets. But what exactly are they? Why do I require a wallet to store my invisible currency? That's a good question, and the best way to answer it is to look back at a historic year in cryptocurrency.
It's no secret that the cryptocurrency industry is plagued by fraud, cyber attacks, and theft. BadgerDAO was robbed of approximately $166 million in funds in December 2021. Days later, robbers stole approximately $208 million from BitMart. To top it all off, the largest cryptocurrency heist in history (to date) occurred only in August 2021, when Poly Network was hacked and lost a staggering $831 million in investor funds.
Is your heart already pounding?
What is the definition of a cryptocurrency hardware wallet?
Hackers are a major reason why you should take precautionary measures to protect your cryptocurrency. This is why many cryptocurrency investors invest in hardware wallets.
A hardware wallet is a physical wallet (typically the size of a USB thumbdrive) that allows you to store your cryptocurrency offline. By removing your digital currency from the internet, you increase your chances of avoiding cyber attacks in which someone steals all of your hard-earned invisible money.
Every hardware wallet includes a public and private key. To understand what a public and private key are, think of them as a bank account.
A public key is analogous to a bank account number. Anyone who has your public key can transfer crypto to you in the same way that you can transfer funds to your bank account. A private key is analogous to the PIN on your debit card. It's a form of security that prevents unauthorised access to your account, so don't share your PIN with anyone or leave it lying around.
Why do you require one?
Unfortunately, this thriving industry is not as well regulated as it should be.
To begin, you should understand that crypto wallets are typically classified into two types. The first type is a "hot wallet." The term "hot" simply indicates that your wallet is connected to the internet. On the one hand, this implies that any cryptocurrency that is left online is vulnerable to cyber-theft. On the other hand, it's the most convenient way to access your cryptocurrency, and you're less likely to misplace it (more on that later). Hot wallets that you may have heard of include MetaMask and Coinbase Wallet.
A "cold wallet" is another type of cryptocurrency wallet. As you might expect, it essentially means the inverse of a hot wallet. When a wallet is offline, it is "cold," which means it cannot be compromised by hackers. A cold wallet, which is usually in the form of a physical wallet, can, however, be misplaced or lost. Fortunately, your PIN should prevent others from accessing it, and there are a number of backup programmes that will allow you to recover your cryptocurrency if you get into a jam.
Furthermore, if you want to make transactions on the fly, a cold wallet may not be for you. Despite being more secure, you'll frequently need to rely on a USB-compatible computer to get started. Having said that, an increasing number of cold wallets are utilising Bluetooth technology to combat this issue of inconvenience.
Hardware wallets (also known as cold wallets) are the most secure option for storing all of your cryptocurrency. All you need to do is transfer your cryptocurrencies from the exchange to the hardware wallet. Then you can unplug it and store it in your desk or attach it to your keychain to carry it with you wherever you go.
We've handpicked a few hardware wallet options to help keep your cryptocurrency safe.
Picks from our experts
Ledger Nano S
The ideal entry-level hardware wallet for those on a tight budget. This cold wallet is made by Ledger, one of the market's first and most popular hardware wallet manufacturers. Unless you look closely, the Nano S looks like any other SanDisk USB drive. It can support over 1,800 different types of coins and tokens, making it both versatile and knowledgeable. However, it can only hold three coins at once. If you own more than three types of cryptocurrency, you should consider the next product on our list.
Ledger Nano X
The Nano X is a significant step up from the Nano S and is designed for cryptocurrency enthusiasts. This wallet allows you to manage up to 100 coin apps at once, including Bitcoin, Ethereum, and others. Furthermore, the Ledger Nano X includes Bluetooth connectivity, allowing you to access Ledger Live, the "all-in-one crypto ecosystem," on your smartphone or computer without the use of cumbersome cables.
SecuX W10
SecuX is one of the most competitive brands on the market due to its affordability as well as its status as one of the world's most secure hardware wallets.
If you're looking for the best bang for your buck, the SecuX W10 is one of the few options under $100. While most hardware wallets are accessed via your computer, the W10 allows you to do so via its 2.8-inch touchscreen. The SecuX W10 can store up to 500 accounts and all major cryptocurrencies such as Bitcoin, Ethereum, Ripple, and over 1,000 ERC-20 tokens.
This is an excellent choice for those of you who own multiple coins, trade frequently, and want premium security on a tight budget.
SecuX V20
If you want the Bluetooth capability of the Ledger Nano X as well as the touchscreen display of the SecuX W10, the SecuX V20 offers the best of both worlds at an affordable price.
When comparing the SecuX W10 to the V20, the W10 falls short due to its inability to connect to your smartphone. So, if you prefer to monitor your cryptocurrency on a larger screen, this model is for you.
BitBox02
BitBox isn't as well-known as some cryptocurrency wallet brands, such as Ledger, but it performs just as well and is an excellent first hardware wallet for new investors. All you have to do is instal the BitBox app on your device, configure it, and you're ready to go. It even includes a Micro SD card that can be used as a password-free backup. This means you won't have to write down a seed phrase, as most crypto wallets require. Of course, you can still set one up if you want to.
The BitBox02, on the other hand, is limited to only three blockchains — Bitcoin, Litecoin, and Ethereum — but that's fine if you're just interested in dipping your toe into the crypto market to diversify your portfolio.
Wallet accessories for your hardware
If you decide to go with a Ledger, you should get one of these protective pods. They resemble a mini drink bottle and are simple to attach to your keyring, making it less likely that you will misplace or break your wallet.
If you prefer something a little bulkier, this protective case for the Ledger Nano S is a good option. This one is more of a hardshell case that will keep your Ledger secure and comfortable.
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