. I crossed out that paragraph; please tell me, if you lose your hardware wallet or it is destroyed, how you will ever get access to your crypto again? It's my understanding that the whole security of it is that it's linked to that ONE key. If you could simply replace it, then any criminal could get a similar one and steal it.
Please help me understand this.
Your hardware wallet have no keys when you buy them.
When you turn it on for the first time it will reset and generate a new (seed) key. It can generate unlimited seeds, and the seeds are not attached to the device.
When you note down the seed in a piece of paper and insert your PIN the device will save that seed. It will be saved there only for convenience. If you fail the PIN 3 times in a row the device will reset and the seed will be lost forever, and the wallet will not be accessible
The only way to recover your wallet if it resets is by entering the seed that you noted down in a piece of paper.
Hardware wallets are important because they are a safe way to generate your seed.
If you download electrum or other softwarewallet and note down the seed it will have the same effect, but it is less secure because you dont know if a hacker intercepted your connection and noted down your seed as well.
If you have the seed in a paper you can access that wallet anywhere with any software Or another hardware wallet.
TLDR:
You can lose your hardware, but do not lose your paper where you noted down your seed