Using a hardware wallet is another way to store your private keys – they are kept safe on a hardware device. Those devices are referred to as Cold Storage Wallet meaning that they appear offline.
If you want to learn more about other types of wallets like Hot Wallets click here, or here for Paper Wallets, or here for an extended article about Bitcoin Wallets.
Comparing to other wallets, the hardware one provides major advantages:
- Private keys are stored securely on the device and can’t be accessed from the web
- Not exposed to software viruses – even when connected to a infected computer
- Unlike the paper wallet, this one has buttons that allow you to confirm actions, which means no actions are being made on the computer you are using.
Hardware wallets are much more secured than the other types of wallet but they come with a cost – you can spend around 99$ for your new device. Another downside – like any other hardware, it can break down. Currently cold storage wallets are considered as the best way to keep your Bitcoins.
Hardware Wallets on the Market
TREZOR – Security Security
With a price of 99$, the device generates the private keys. This information never leaves the hardware, making it malware secure. TREZOR can store unlimited number of keys. This wallet generates a recovery seed, which recovers your wallet information (bitcoin balance, transaction paths and private keys) in case of theft or just losing the device. You can have your recovered information transferred on a new wallet.
TREZOR’s PIN has a special security feature while entering it – keyloggers cannot record it. You can also set an additional encryption passphrase for more security.
KeepKey – Security Security Security
Priced at 99$, this wallet appears as a USB device that stores your coins. All transaction should be approved via the device – it has a bigger screen than others and it offers better security features with it.
KeepKey offers an outstanding recovery feature that utilizes a rotating cipher to restore your keys. Having this said, it’s not needed to store private keys on the device: the recovery process is so secure that this hardware wallet can be used as a transaction device for paper wallets.
Nano S by Ledger – Cheaper, Smaller and..same?
Pricing at 65$, this hardware wallet is a USB device with a screen to navigate you and a single button on the side for confirmation of actions, yes just like all the others. The perk about Nano S is that it allows safe execution of many open source applications in complete isolation. Nano S is cheaper than most wallets and the security difference is minimal.
Overall there is no reason to buy a more expensive wallet then this one, it should supply for all your needs. You can purchase the Nano S directly from the company here.
As a bonus I found this video of a guy testing how durable are the hardware wallets I just reviewed. (none of them break actually)