A hardware wallet is a physical device, that looks like a USB, designed to store digital currencies. The device is punted as the most secure way for users to store their digital currencies, as it keeps private keys offline. The device enables users to store their private keys that then enable access to their holdings. When a user needs to authorize a transaction, the device is connected to a laptop or computer to process it securely.
Hardware wallets provide peace of mind, as they provide an added layer of protection against scams, hacks, and malware. They typically include advanced security protection in the form of a PIN code, an optional password, or a phrase. If a wallet is stolen, keys can’t be extracted, as these are never exposed to the internet. However, if a person loses their device, the stored digital assets are backed up by a recovery phrase. As is famously known in the crypto community, James Howells accidentally discarded his hard drive back in 2013. T
he drive, believed to be in a landfill in Newport, south Wales, contains around 8,000 Bitcoin (currently worth approx. $300M) which he has been unable to recover despite his continued efforts. Remember, keep track of your hardware wallet!