Bitcoin hardware wallets can be purchased for use as an external miniature computer or piece of hardware that generates and stores your private keys for you. They work like standard Bitcoin wallets in that they are the safe house for your private keys, which are essential for making transactions in buying, selling or trading Bitcoin.
There are a number of different varieties on the market and they make a lot of sense for people who are skeptical about online security. If you’re dealing with large amounts of Bitcoin, then perhaps a Bitcoin hardware wallet is the storage solution for you.
The advantages of Bitcoin hardware wallets
The biggest advantage to choosing a hardware wallet over all the other bitcoin wallet alternatives is that it’s the safest option available. Aside from being completely secure, hardware wallets also have the following advantages:
- The private keys are stored in a protected, tamper-proof area of the wallet
- Private keys are completely offline to your computer and never exposed to it, so they’re safe from being hacked or attacked by malware
- A Bitcoin hardware wallet can be restored from the seed or master if you lose it (ensure that this is kept in a safe place)
- Requires minimal operations and offers very simple functions in a secure manner
The disadvantages of Bitcoin hardware wallets
The only real disadvantages of having a Bitcoin hardware wallet are easily overcome:
- You need to buy one to get started. Most online and downloadable wallets are free
- You need to wait for it to be shipped to you if it’s coming via post
- There is the potential that you could lose it, but as mentioned in the advantages, you can restore it again if need be
- There is the potential for it to become corrupt or to fail at some point. Again, with a simple restoration, this can be overcome