Hot vs Cold Crypto Storage
Cryptocurrency Hardware Wallet
The prevalent cryptocurrency hack attacks witnessed recently is a concern for many people. Notably, the 2018 Japanese Coincheck exchange hack, where $543 million was stolen, indicates that online cryptocurrency storage is vulnerable.
It stands to be known that the transfer of files within and across the cryptocurrency platforms is not secure. While you can store private keys on your PC or smartphone, it's not safe since malicious people can easily decrypt them with ease. Therefore, the safest solution is to use hardware wallets.
What's a hardware wallet?
Hardware wallets are a particular type of blockchain ecosystem wallet that provides security she utility by storing private keys on a safe hardware device. They are regarded to be the safest and secure components to store your cryptocurrencies.
Why you should use hardware wallets
Hardware wallets ensure the safe protection of your assets even when working from a vulnerable computer. They provide extra safety from hacking, phishing, and malware.
The beauty with this plug-in device is; it's a portable key to use to access your bitcoin assets from anywhere in the world. Besides, hardware wallets enable you to login into dApps and regular apps and use them without creating user accounts.
They help keep assets in a central location
It's possible to work with a variety of cryptocurrency at the same time when using a hardware wallet. These wallets enable you to manage and different backup blockchains such as ethereum, bitcoin, lumens easily.
Wallet to wallet trading
Wallet to wall traders can now trade safely from hardware wallets as they ensure maximum protection of digital tokens all the time. Instead of making deposits to your exchange wallet, you trade directly from the hardware wallet, saving you time by surpassing fees and delays expected when making withdrawals.
5. Pin Encryption
Hardware wallets enable you to create an encryption pin only known to you. If a different person tries to gain access, the hardware device will self-destruct itself after the third attempt. Failure to go through will prompt the hardware wallet to delete all public keys and private keys to ensure your funds are safe.
Private keys' immunity to attacks
You only get to put in your private keys in your hardware device. Since they aren't stored on the computer, malicious individuals cannot copy or hack them.
The difference between cold wallets and hardware wallets
The rise in popularity of cryptocurrency has also given birth to different cryptocurrency wallets.
Most users prefer hardware wallets. But are there any differences between them and other wallets, for instance, cold wallets?
A cold storage wallet encrypts all your bitcoins in a drive that resembles a hardware wallet. The cryptocurrency holder is the only one with authority to access the data in the cold wallet. On the other hand, hardware wallets enable you to keep your encryption keys, providing safe access to your bitcoins.
Hardware wallets allow users to utilize hardware only when accessing encryption keys. You will require both software and hardware access for cold wallets, which is far safer than traditional storage choices.
Moreover, you should choose cold storage wallets when making long-term cryptocurrency investments since they are more secure. But if you are a frequent cryptocurrency trader, hardware wallets will be an ideal choice for you.