Hardware Wallets Explained
How they work and why they’re important.
Hardware wallets are a key component of the blockchain ecosystem. They provide security and utility when interacting with blockchains. Here’s why you should have one if you don’t already.
They’re Super Secure
Keep your assets safe even when the computer you’re using isn’t secure. Hardware wallets give you an extra layer of protection against cyber attacks, phishing sites, and malware.
Many Assets, One Location
A hardware wallet can work with multiple blockchains simultaneously. This allows you to manage Ethereum & Alt. Coins, Bitcoin, Lumens, and more, all on the same device. All of them can be backed up easily with a single recovery phrase.
Convenience
A hardware wallet, often a small plug-in device, is a portable key to access your crypto assets safely from anywhere. A hardware wallet can “log you in” to many dApps without having to create new accounts. You can even use them to log in to regular apps like Google and Facebook.
Wallet-to-Wallet Trading
Platforms like Radar Relay let you trade directly from your hardware wallet. This is the safest way to trade digital assets as you retain custody of your tokens at all times. The assets trade straight from your wallet rather than being deposited to an exchange wallet. That saves you time by skipping deposit delays and fees from withdrawal limits.
Here’s how they work
Private keys are the key
Cryptocurrencies are never stored within the hardware wallet itself, they always live on the blockchain. The hardware wallet merely stores your private key. That private key opens the lock to your address on the blockchain where your assets actually live. Since the blockchain is everywhere, all you need is your hardware wallet to interact with your tokens.
Hardware wallets are dual purpose
01. They protect your private keys
Hardware wallets are often considered cold storage, as they isolate your private keys from the Internet, mitigating the risks of your assets being compromised in an online attack.
02. They let you sign and confirm transactions on the blockchain
When you create a blockchain transaction, you’re “signing” a special message. Your “signature” proves ownership of your private key. It’s impossible to forge this signature without the key, so no one else can make a transaction on your behalf without it.
Safe With You
Your private keys stored on the hardware wallet are protected by a PIN and an optional passphrase. Should a thief take possession of your hardware wallet, it’s near impossible for them to extract your keys. The keys are never exposed to the internet so they can’t be stolen. That’s why it’s known as cold storage.
If your hardware wallet is lost, the assets are backed up with a single seed phrase. A seed phrase, also known as a recovery phrase, is a list of words that re-generate your private key. You can use your seed phrase to move your keys to a different hardware wallet.
Security in Three Steps
While every wallet is a little different, using them is pretty similar:
- Plug the device into your computer and unlock it with your PIN.
- Create a transaction, like a trade on Radar, then confirm it on the device’s screen.
- Rest assured your keys aren’t in danger.
Get Yourself a Hardware Wallet:
