What is a Hardware Wallet & How Does it Work?

With personal cyber security being a number one priority in today’s world of remote working and digital connectivity, it has become more important to keep your data safe and secure. In the case of cryptocurrencies, there are many options that you can choose from to keep your hard-earned coin safe. Of all the software and hardware choices out there, a hardware wallet is one of the simplest and most effective ways to store your currency.

What are Hardware Wallets?

A hardware wallet is a piece of physical technology (sometimes resembling a USB thumb drive) that securely guards a crypto user’s private cryptographic keys in offline or “cold” storage, ready to be used online for completing a crypto transaction of some sort at a later date. Unlike a conventional wallet for physical or fiat currency, a crypto hardware wallet does not contain any of a user’s existing coins.

What are Cryptographic Keys?

Cryptographic keys, are a sequence of numbers and letters (around 25-36 characters to be precise) that allow a user to access and make transactions with their digital coin. A user’s earned cryptocurrency is simply data that exists on a blockchain. Holders access the blockchain to make transactions through a set of digital keys, one public and one private. The public keys are accessible to everyone (hence the distributed or “shared” part of the ledger technology that cryptocurrencies are based on) and act as a kind of bank account number. The private keys (sometimes referred to as secret keys) can be likened to a pin code, which is why they need to be kept as secure as possible.

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