Ninjastic
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Board Bitcoin Discussion
Re: Hardware Wallet
by
Aura
on 10/03/2018, 13:59:08 UTC
Quote from: bug.lady on March 07, 2018, 11:21:07 AM
Quote from: Aura on March 07, 2018, 11:10:22 AM
Quote from: bitart on February 25, 2018, 08:25:55 PM
Quote from: steadyrice on February 25, 2018, 06:54:17 PM
Hardware wallets are a must have, especially if you have a lot of money in crypto. Think of it this way: Pretty much every single wallet has an app and you can carry it around with you on your phone. If you had a million dollars, would you go about your day with all that money on you? Or would you store it somewhere safe, like in a safe in your home? I think this analogy explains the need to own hardware wallets pretty well.
You should keep your coins secure, hardware wallets are the best for this purpose, if you want to use the coins as well. You should keep the hardware wallet in the safe unless you really want to spend some coins, because to check you balance, there's no need to have the hardware wallet at your fingertips. You can check your balance wiht your address on a blockchain explorer, you only need the hardware wallet if you want to spend or e.g. if you want to sign a message.
The best thing is that when you use a hardware wallet, you don't need to expose your private keys, because the hardware wallets does everything inside, and it only send signed transaction or signed message out, which doesn't cointain private key at all.
The only, the most important thing is the seed (the 24 words, generated at the first start of the hardware wallet), this is the key of the backups, so keep it in a secure place, more secure than the hardware wallet itself. As long as you (and only you) have that seed, you and your coins are safe.
Hardware wallets are not the most secure way to store Bitcoin. I can give you multiple reasons why paper wallets are much better for this purpose. First, hardware wallets are not fully open-source, so you don't know if the code has a backdoor. Second, hardware wallets not being open-source means that you can't build it from source, so you have to trust on the manufacture that the official program is operating on the hardware. Third, they cost a lot of money compared to paper wallets that do the same thing. Lastly, hardware wallets are becoming are target for hackers and no software is really immune.
Well I could easily list some problems with paper wallets too:
  • they can get lost or thrown away or burnt or otherwise distroyed - easily, unless they are backed up
  • while creating and backing up a paper wallet you can make a copy-paste mistake and thus render your founds irretrievable
  • if somebody has even a glimps at one of your paper wallet copies - your founds are done with
  • if you set up your paper wallet on an already compromised system - your founds are done with

The list could go on. Everything has their advantages and disadvantages. But considering what is in store, I would go along with the hardware wallet option.
A hardware wallet can be burnt or thrown away either, but a paperwallet has the benefit that you can copy it so you can spread it over multiple places. You should recheck it multiple times, if you're too lazy to do this you should not have a wallet in the first place. I personally think that a hardware wallet is more recognizable than a paper, especially when you write it yourself. You shouldn't use Bitcoin on a compromised system, same applies for hardware wallets. However, it's your own choice but definitely not the only way to store Bitcoin.