Best Hardware Wallets for August 2024

What Are Hardware Wallets?

Hardware wallets are physical devices that provide an additional layer of security for storing your cryptocurrencies. Hardware wallets are small devices usually about the size of a flash drive that are designed to store your private keys and sign transactions. Typically, they connect to a phone or computer through a USB port and require you to press a button on the device every time you want to sign a transaction.

Hardware wallets are primarily used for cold storage, meaning that they are disconnected from the internet while storing cryptocurrency. Hardware wallets are also known as "cold storage wallets" or “cold wallets.” Think of them like an underground bank vault for your digital money.

Can You Trust Hardware Wallets?

Not all hardware wallets are created equally. There are three things you should look for to assess the security of the hardware wallet you’re looking to buy:

A reputable brand: Do a quick search for reviews of the best hardware wallets to make sure the brand has a good reputation for making secure wallets. If you can't find any reviews, it may be best to look for a different wallet to store your cryptocurrency. If the hardware wallet has reviews, do your research to see if those reviews are from legitimate sources. If the reviews seem fake or are overly positive, it’s probably best to look for a different wallet.

Security features: Look for a hardware wallet that offers a wide range of security features. For example, a hardware wallet should have a screen that prevents the private keys from being exposed even if the wallet is plugged into a computer. It should also have a pin code that must be entered in order to use the device. If the hardware wallet you’re looking at doesn’t have a backup or recovery phrase, it’s probably not a secure device.

Open source: Look for hardware wallets that reveal their source code. This will allow you to verify that the device is not doing anything malicious.

Hardware Wallet Storage

Hardware wallets can be kept in a safe place and used on an as-needed basis and, because they are offline devices, they provide a very high level of security. The most important feature about hardware wallets is that they keep your private keys, your digital signature, and your cryptocurrencies offline, away from the internet.

When it comes to storing your hardware wallet, keep it in a safe place where you can keep it safe from physical damage. Since hardware wallets are small devices, they are easy to lose so it is recommended to store your hardware wallet in a secure place where you are the only one who knows where it is.

Hardware Wallet Security

Hardware wallets make it nearly impossible for hackers to steal your funds. That’s because anyone who wants to move money out of your wallet will need physical access to your hardware wallet.

In addition to this, the best hardware wallets typically use a second layer of protection known as a "PIN code." This PIN code is a 4-5 digit code your need to enter to access the wallet. No one will be able to steal your funds if they don't have your PIN code.

Hardware Wallet Recovery

If you ever lose your hardware wallet, you can always recover your funds with the recovery phrase or "seed". Just like a paper wallet, the recovery phrase is the key to your funds and if it is lost, your funds will also be lost. Seeds are made up of a long list of words that are typically stored on a card that comes with your hardware wallet. If you lose your hardware wallet, you can use the recovery phrase to restore your cryptocurrency to a new wallet. For this reason, it’s very important that you keep your recovery phrase safe so that you don’t lose it. If you lose your recovery phrase, you will not be able to recover your funds.

What Is The Recovery Phrase?

The recovery phrase is a group of English words that can be used to recover your cryptocurrency if you lose your wallet. A recovery phrase is a randomly generated group of words. It is a group of 12 to 24 words that represent a seed from which you can derive your private keys.

Your recovery phrase is a secret phrase that you should never tell anyone, not even your loved ones or your friends. It is important to keep your recovery phrase a secret because if someone else is in possession of it, they will be able to access your cryptocurrency.

Hardware Wallets vs Software Wallets

When you use a hardware wallet, your private keys are stored in the hardware device. This is unlike software wallets, where your keys are stored on your hard drive. Your private keys are vulnerable to hackers if they are stored on a computer. If a hacker gains access to your computer, they can easily gain access to your crypto-assets.

The best hardware wallets protect your keys by using a combination of passwords, pin codes, and physical security measures to prevent unauthorized access. Hardware wallets are generally considered to be the most secure way to store your cryptocurrency.

Some software wallets also have support for hardware wallets. This means that you can use your hardware device to sign transactions that are being made on your phone or computer.