What is a Hardware Wallet and why do you need one?

One of the most frequently asked questions at trade shows

We had a booth at Blockchain Expo North America last week in Santa Clara. Other than the typical “So, what do you do?” The one question we got asked the most by attendees was “What is a hardware wallet?”

So, what is a Hardware Wallet?

To answer this question, we first need to explain “what is a wallet?” You use your everyday wallet to secure fiat money (USD/JPY/NTD…) right?

Wallet for Fiat Money

The same concept should apply to cryptocurrencies as well — a wallet for crypto holders to secure crypto assets.

Although technically, a wallet doesn’t actually store Bitcoins like your everyday wallet. It helps to store the most important thing for crypto assets — the private key. The private key is the “key” to your crypto assets, which means if anyone has access to your private key, they will have the ability to use or move your assets freely. A cryptocurrency wallet helps to keep your private key safe, and most of them also come with transaction functions — such as sending, receiving, or even exchanging.

Now that we have clarified the definition of a cryptocurrency wallet, it’s good to revisit the original question — so what is a hardware wallet? A hardware wallet is a physical cold storage to secure crypto assets. It’s never connected to the internet, which means there’s no way for a hacker to obtain your assets remotely through the internet.

What are the other types of Cryptocurrency Wallets?

Below is a chart containing most types of cryptocurrency wallet on the market. We will use this opportunity to discuss the most popular kinds of wallets and the pros and cons of each one.

Cryptocurrency Wallet Types

Mobile Wallet: A mobile application, either an Android or iOS App.

Pros: Convenient, Easy-to-use

Cons: Vulnerable to hacks

Web Wallet: A wallet to be accessed via a web browser (including exchanges).

Pros: Convenient, Suitable for first-time users

Cons: Most vulnerable to hacks (a single hack may cause assets loss of over thousands of people)

Hardware Wallet: A physical, offline storage.

Pros: Secure

Cons: Inconvenient, Time-consuming, High cost

Paper Wallet: A piece of paper to store (QR codes of ) private keys.

Pros: Secure, Low cost

Cons: Inconvenient to spend, Vulnerable to water/fire/bug… Generally speaking — fragile

So, why do you need a Hardware Wallet?

If you’ve invested more than $100–1000 USD in cryptocurrencies, we would highly suggest you get a hardware wallet.

Why? The answer is simple. Hardware wallet is the most secure solution for you to store your crypto assets.

Most of the hardware wallets require a computer environment, which means you need a computer and a USB cord to complete a transaction. It sounds pretty inconvenient, but at least you will not have to fear that one day when you wake up in the morning, all of your crypto assets are gone (a true event that happened to one of our co-founders).

Therefore, the most common use case for the traditional hardware wallet is to keep 90% of the assets in it for safekeeping and leave less than 10% on a hot wallet for transactions.

What if I want both convenience and security?

You’ve come to the right place. This is exactly what CoolBitX is trying to solve. The CoolWallet S is the world’s first hardware wallet that is communicated by Bluetooth and is compatible with mobile phones (both Android & iOS).

CoolWallet S — The Best Cryptocurrency Hardware Wallet

Embedded with CC EAL5+ certified Secure Element Microchip, the CoolWallet S provides a completely offline, top security environment for private key saving. It's thinness and credit card-size shape and feel makes it ideal to carry with you everywhere on the go in your everyday wallet. Last but not least, did you know that CoolWallet S also offers native coin-to-coin swap feature? You can complete transactions safely and conveniently all within our app!

How are you storing your cryptocurrencies right now? What's your thoughts about hardware wallet after reading this?

To find out more about the CoolWallet S or get connected with fellow users you can visit our Twitter / Telegram / Website.