What is a Hardware Wallet and How Does it Work?

What is a Hardware Wallet and How Does it Work?

Storing cryptocurrency is easy to do. But not all wallets are secure and even less are impenetrable. Hardware wallets, in this case, offer the best security for your coins.

What is a hardware wallet?

Hardware wallets are devices that help an individual generate, unlock and access his cold wallets. The most popular hardware wallets are Trezor and Ledger.

How does a hardware wallet work?

Hardware wallets were introduced to the public after observing the difficulties presented in paper wallets. The devices come in different shapes and sizes making it a lot easier for investors to have their wallets with them at all times if necessary, as well as keeping an overview of their funds.

Within a hardware wallet, users can create multiple cold wallets for a large number of different cryptocurrencies and transfer these to any other wallet of preference. Currently, popular hardware wallets support more than 1000 coins.

And what happens in case you lose your device? Even if this happens, you are totally safe. Users can easily restore their funds thanks to a secret 12 or 24-word password that is used to regain access to their lost wallets.