What is a hardware wallet?
A hardware wallet, also called a bitcoin locker or bitcoin safe, is the most secure bitcoin wallet. A hardware wallet is a device to be connected to your computer, using a USB or another kind of connection. Via this device you can run a bitcoin (or alt coin) wallet to securely store your bitcoins, and still send and receive them easily. A bitcoin hardware wallet will give you the safety of cold storage combined with the ease of an online wallet.
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Compare hardware wallets
When you plan to buy a hardware wallet, it is advisable to realize exactly what you are looking for (if you want to make many transactions / store your bitcoins as an investment), and how important safety is to you and how much you want to spend. Below you can compare different bitcoin hardware wallets and order them straight away.
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Store your bitcoins safe
A hardware wallet is a form of cold storage. The definition of cold storage is to keep the access to your wallet (private key) offline and delete all the online files. There are several other ways to keep your bitcoins in cold storage like a paper wallet, brain wallet and a wallet on an offline computer.
In the past many bitcoins were stolen by hacking an online computer and sending the bitcoins to another wallet. By keeping your bitcoins on a hardware wallet, they are offline / in cold storage, and impossible to be hacked. This means a hardware wallet is one of the safest ways to store bitcoins.
Why you should buy a hardware wallet?
There are many reasons to own bitcoins and alt coins. Some people use them to make payments and others as an investment. In both of these cases a hardware wallet is an important device to ensure security.
When you have purchased bitcoins as an investment, and the price is rising, it would be a devastating loss if they got stolen. So when you invest in Bitcoin it is advisable to save them in cold storage, because you don’t have to retrieve them for a long time and it is completely safe.
When you use a hardware wallet, you store the (access to) bitcoins on the device and keep it in a safe or on another secure and dry place until the price is satisfactory to sell them or just a part of the bitcoins. This can easily be done by connecting with the hardware wallet, logging in, and then selling the bitcoins on an online exchange.
When you own bitcoins and you want to be able to make transactions, a hardware wallet outperforms other ways of cold storage, because you enter an environment where you can securely and easily make transactions online. A hardware wallet combines the safety advances of cold storage and usability of an online wallet.
How does a hardware wallet work?
A hardware wallet can be thought of as a USB stick to store the access to a bitcoin wallet. The disadvantage of placing a wallet on a normal USB stick, is the fact that you cannot make transactions or updates in a secure environment.
The current available hardware wallets contain not only the wallet, but also advanced tools to protect your bitcoins in an online environment. How advanced these tools are is different for every brand and type. The safest hardware wallets are often most expensive.
In general you have to create a pin code or a password when you configure your hardware wallet. You also have to write down the recovery seeds on a card and keep it in a safe place (these seeds are used to restore your wallet when your device is lost or broken). After that you can send some bitcoins to your public address and then the bitcoins are safely stored.