Storing cryptocurrency safely and securely is not difficult, but it can be a bit of a challenge. Whereas many people openly trust exchanges, that is never a place to store one’s crypto assets. Hardware wallets, while somewhat costly, offer tremendous benefits to its users.
Hardware Wallets Are Worth the Investment
One potential drawback of hardware wallets is how they have a cost. It is not possible to obtain one of these devices for free, unless it comes as a review unit. That being said, it is certainly worth the investment. All cryptocurrency holders need to explore the many options at their disposal to keep funds safe.
There are many different types of hardware wallets for cryptocurrencies, which we will cover in a separate blog post later on. For now, it is sufficient to know there are many advantages to using these devices. In fact, hardware wallets should have become the norm a very long time ago.
Your Keys, Your Coins
The main selling point of hardware wallets is how they empower the end user. More specifically, the person owning the device will also be the sole owner and controller of the crypto assets. Without having access to the private keys, a user is never fully in control of their wealth.
A hardware wallet generates private keys locally, and stores them on the device itself. This prevents data from being exposed over the internet, as these devices do not connect to the Internet on their own. Without access to the device, the funds stored in the associated wallet cannot be accessed or retrieved.
Much Better Security
Everyone who has ever used an exchange will note how there are certain security issues. Logging in requires a username and password. Most users don’t even bother setting up two-factor authentication to protect their credentials either.
With hardware wallets, there are no online login procedures. Owners either create a PIN code or a password on the device, which is never shared online. It is a very straightforward and accessible process that does not involve trusting third parties.
An extra benefit is how a hardware wallet will act on their own. While it can be connected to a computer to interface with, it also runs completely separately. Using a hardware wallet with a compromised computer will not affect the private keys or the funds stored on the wallet itself.
Hardware Wallets are Easier to Recover
Recovering one’s login credentials from an exchange is often a daunting process. Due to the innate insecure nature of such credentials, anyone with sufficient knowledge can recover them on the user’s behalf. Far from an ideal situation, yet something that may not be easy to address in the future.
With hardware wallets, the only way to “restore” the wallet is to use a recovery seed. This information is only known to the end user, as it is generated during the initial setup process. It is advised to make a copy on paper, but keep that information in a secure location. With this recovery seed, the wallet can always be restored, even if the initial device were to be lost or stolen.
Support for Multiple Cryptocurrencies
In the early stages, cryptocurrency hardware wallets only supported one or two major assets. Allowing users to safely store Bitcoin and Ethereum is the main order of business. That being said, there are tons of alternative assets out there that need to be supported as well.
Thankfully, things have improved in this regard. All of the major hardware wallets now support dozens of currencies, if not more. Finding support for specific assets may be challenging, but there is often a solution just around the corner.