A hardware wallet is a physical device that securely and isolates a user’s cryptocurrencies from computer or smartphone vulnerabilities. These wallets have a few key advantages over traditional software wallets:
- Private keys are often stored in a protected area of a microcontroller, and cannot be transferred out of the device in plaintext. This makes them immune to computer viruses that steal from software wallets.
- They can be used securely and interactively. They can make secure digital payments. They are immune to keyloggers because the private key can be generated on the hardware wallet and never reaches the computer.
- Immune to the risk of “Zero-day” exploits. A zero-day vulnerability refers to a hole in software that is unknown to the vendor. This security hole is then exploited by hackers before the vendor becomes aware and hurries to fix it. This exploit is called a zero-day attack. Hardware wallets aren’t exposed to this risk if used correctly.
- Control over your money. With a hardware wallet, you own and control your keys. This ensures that you have full control over your cryptocurrency.
Examples of hardware wallets include Trezor, Ledger Nano S, and KeepKey. These wallets often support multiple cryptocurrencies and have interfaces for managing and trading your assets.
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