When first searching about Bitcoin and cryptocurrency wallets in general, it’s going to be a really common occurrence for people to be suggesting the usage of hardware wallets.
But why? Are they really safe and secure? Let’s have a deep dive into it.
First off, what is a hardware wallet?
Hardware wallets are small devices solely made to hold your wallet’s private keys, allowing you to receive and send bitcoin and other cryptocurrencies without putting your wallet’s private keys at risk. In contrast to software wallets on your computer or phone whereas a malware or virus can potentially steal your wallet’s private keys on your phone, effectively stealing your funds.
With a hardware wallet, even if you do a transaction on a malware or virus-infected computer, hackers would still not be able to steal to your wallet’s private keys. This makes hardware wallets a really ideal way of storing bitcoin and other cryptocurrencies as it is highly secure.
Hardware wallets might be a bit costly for some people that only hold coins that are worth a few dollars, but if you’re holding a significant amount of money through bitcoin or other cryptocurrencies, getting a reputable hardware wallet should be a top priority.
How safe are hardware wallets?
As long as you purchase your hardware wallet straight from a reputable hardware wallet seller like Ledger Labs, your funds are going to be safe due to reasons stated previously.
Again, when using a hardware wallet, your wallet’s private keys are safe inside the device. The only way you could lose your funds if you intentionally sent the coins to a scammer, or if a hacker or thief gets a hand of your 24-word mnemonic phrase.
Scams of many forms have existed since the beginning of time, and will continue to exist until the end of humanity. And when there’s money, there will be scams. Especially in the Bitcoin and cryptocurrency space whereas hackers can steal your coins and get away with it without leaving a trace on who they are. This is why we give heavy emphasis on people learning about cryptocurrency scams, as to learn how to not get tricked by them as some cryptocurrency scams are really clever.
Your 24-word recovery phrase
Your 24-word recovery phrase is pretty much your wallet’s backup, in-case you lose access or break your device.
The reason why a Ledger Nano hardware wallet comes with a ‘Recovery Sheet’, is for you to have a piece of paper to write your 24-word recovery phrase with.
But why should I write it down on a piece of paper? Why not on notepad or my notes app instead?
There are malware and viruses that are created solely to steal people’s 24-word mnemonic phrase. That itself should convince you to not store your backup digitally. Once a hacker gets ahold of your funds, always remember that bitcoin and cryptocurrency transactions are non-reversible. You will never get your funds back. With paper, no hacker can gain access to that paper unless you take a picture of it.
Keep it simple. Pen and paper, and place that piece of paper on a fire-proof safe.
Which hardware wallet should I buy?
While there are a few other hardware wallet manufacturers out there, we personally suggest Ledger hardware wallets because it’s simply the device that we’ve had a good experience with.
If you can’t decide which Ledger hardware wallet to get, we’ve created a comparison article here: Ledger Nano S vs Ledger Nano X
Along with that, when laid on top of a table, it almost just looks like a typical USB thumb drive!
Where should I buy my hardware wallet?
To avoid getting potentially altered devices or opened packages, always purchase from the official store. Sure you might be able to buy from other sellers like on Amazon or eBay for slightly cheaper and faster shipping, but don’t take the risk. If you’re holding bitcoin and other cryptocurrencies and you think that they will be worth a lot more in the future, it would be really nonsensical to purchase from 3rd party sellers just so you can save a few dollars.