What is Crypto Hardware Wallet | How to use a cold wallet
What is Crypto Hardware Wallet? Hardware Wallet is also known as a Cold Wallet, It is a device that keeps your cryptocurrency like bitcoin offline. If you have a large sum of coins it’s best to keep them in a cold wallet. Cold wallet means your private keys are stored on a device that’s not connected to the internet like a separate hard drive or thumb drive companies like Trezor and Ledger make special drives especially for cryptocurrency wallets.
A hardware wallet is a great choice for people who are concerned about security. Its features are more secure than a software wallet, and the security is one of the most important features for any crypto currency. They don’t allow malware to get inside your wallet. A crypto hardware wallet allows you to have your own private keys and store your coins safely.
A crypto hardware wallet is a great way to secure your digital money. A hardware wallet is safer than a digital wallet. It is more difficult for hackers to attack and steal your cryptocurrencies. The best crypto hardware wallets support a variety of cryptocurrencies. Regardless of which one you choose, you should make sure it is compatible with your preferred cryptocurrency. You should never buy a used wallet on eBay or on Amazon. There are many scammers who will try to steal your bitcoins by using a back door.
How to use a Cold Wallet
There are extra protections built in the software of these drives. These companies sensitive information isn’t exposed even when it’s plugged into your computer. The trezor is a little device that you plug into a computer via USB. If you want to access coins then plug it in and then enter a pin (bit of a combination). If you lose the trezor wallet then still you can access coins. When you first set up the device it gives you a bunch of random words known as a recovery seed. This seed is very important and should be written down and kept in a safe place. If the wallet is lost or broken then using the seed to recover the crypto.
Why use Crypto Hardware Wallets?
A San francisco man has over 300 million dollars worth of bitcoin but he forgot his password and can’t access it. He only has two more password guesses before he’s locked out and loses it forever. This unfortunate man forgot his password, he stored the private keys to his bitcoin wallet on a highly encrypted hard drive. The drive only allows 10 password guesses before it locks up, and it’s not a typical hardware wallet designed for crypto. So no pin, no recovery seed, just 10 password attempts then locked forever.
Elon musk once tweeted any crypto wallet that won’t give you your privat keys should be avoided at all costs because you’re trusting those precious private keys to a third party. For more control you can store your coins on your own computer in a digital wallet using software to manage it. However there is some risk of getting hacked and losing your money if the computer is connected to the internet.
If you want to avoid this kind of nightmare then you should store your cryptocurrency safely. When you buy cryptocurrency like bitcoin it gets stored in what’s called a wallet and has a private key associated with it. The private key is sort of password a long string of numbers and letters that are assigned to your wallet. If you want your coins to stay safe you need to keep the private key safe.
There are a few different types of wallets to store your crypto. The easiest way is to store it on exchange where you bought it such as coinbase or Binance. They allow you to buy sell and manage your crypto right on their platform. These exchanges hold on to your private key. You don’t have access to it that means you need to trust the company to keep it safe just like you would need to trust any online company with your data. So you may not want to store large amounts on the exchanges.
There’s also the option of going with a financial app that does more than just crypto companies like paypal and robinhood have added options to buy and sell cryptocurrency but with these apps they may leave you stuck doing transactions in their environment. So if you use paypal you have to cash out with paypal. You also don’t have access to the private keys. Crypto can be complicated and confusing, So do some research and then pick the method that feels most comfortable to you.
Also Read: Trust Wallet vs MetaMask | Crypto Best Wallets