What is a hardware crypto wallet?

A hardware crypto wallet is a physical device used to store your private keys. These come in the form of small, hand-held pieces of hardware that can be easily stored safely. But why would you need a physical device to store your private keys? The main reason why people use hardware crypto wallets is their extremely high levels of security.

What are the different types of crypto wallets?

There are two main types of crypto wallets: software-based hot wallets and physical cold wallets. Hardware wallets, a type of cold wallet, provide one of the most secure ways to keep cryptocurrencies. They work by storing your private keys in an external, physical device (usually a USB or Bluetooth device).

What makes a good hardware wallet?

The best hardware wallets also do not store your private keys in any software. They eliminate the risk of anyone else other than yourself accessing your funds. Crypto wallet technology has come a long way since the early days of crypto. Like any developing market, newcomers are abundant.

What is a cold wallet?

A cold wallet is a crypto hardware wallet that keeps private keys offline – but its defining feature, and what sets it apart from a hardware wallet more generally, is that it never interacts with smart contracts. In other words, it is purely for storing private keys – not for engaging with Web3 applications.