Welcome to Vaultavo’s guide to the crypto hard wallet! If you believe in crypto’s potential to be the future of finance then it is crucial that you understand crypto wallets, how they differ and which is best suited to your needs so you can protect your investments.
Most investors and traders are unaware that they are putting their crypto at risk by utilizing the most common form of crypto storage. In this guide we show you how to best secure your crypto against hackers and render their schemes futile!
What is a hard wallet?
Hard wallet is short for hardware wallet, a digital device that is used for securely storing digital assets. Hard wallets were invented as an alternative to storing your crypto assets on your computer or centralized exchanges which both have unique security flaws which we delve into greater detail later in this guide. If we get technical crypto ‘wallets’ do not really hold your crypto assets but rather cryptographic keys which give you access to your crypto assets which exist on the blockchain.
Wonder how to open a crypto wallet? Most crypto wallets have a cable that connects to your computer allowing you access to its digital platform. Some services also offer the option of biometric authentication which adds another layer of security to protect digital assets. You can learn about this technology right here.
Some hard wallets have bespoke software that you must download on the computer or mobile device in order to make transactions. Once you have this software installed you can generate crypto addresses which you can provide to people who want to make deposits to your account. This can be done while offline, but you will have to connect the hard wallet device in order to withdraw crypto from your wallet. Now let’s look at why hard wallets are so important to the industry and how to never lose crypto.
The importance of crypto security
It is no secret that crypto exchanges are widely successful and attract serious capital. Binance is one of the largest cryptocurrency exchanges and in 2021 it facilitated over $7 trillion in trading volume, this gives you an idea of the magnitude of capital these exchanges are working with. This number is not only impressive to us crypto enthusiasts but also to the hackers and thieves who just see a giant piggy bank, ready for the taking.
Crypto exchanges are not merely exchanges anymore. They host a wide range of services, not least of which include custodial services. If you do not remove your crypto assets from your exchanges then they essentially serve as your de facto online crypto wallets. The problem with this is threefold.
‘Not your keys not your coins’
This is a popular refrain in the crypto community that extols the virtues of self-custody. The first problem with using a centralized exchange is that they control your assets and there is very little stopping them from taking your funds if they hypothetically went rogue and claimed your cold wallet crypto. An act like this would undoubtedly sink the exchange company, but the counterparty risk is undeniable.
Furthermore, cryptocurrencies are often lauded for the decentralized properties, censorship resistance, borderless and permissionless protocols, but by keeping your assets on a centralized exchange you are essentially forgoing all these features that make the asset valuable for the sake of convenience on a digital platform.
We have mentioned the fact that the insane amount of value transacting on centralized exchanges attracts hackers and bad actors who would love to try and steal those funds. An additional issue with centralized exchanges is that because they are complex with multiple functions and features and gateways and bridges they have a greater attack surface, meaning there are more vulnerabilities or points of failure. These exchanges have seen hundreds of millions of dollars lost to hackers due to these vulnerabilities in the first decade of crypto’s existence. Hard wallets by contrast are specifically designed to be simple and single purpose so as to have minimal attack surface thereby making it more secure to protect digital assets.
Hot and Cold Wallets
Hot and cold wallets are often referred to interchangeably with soft and hard wallets, respectively. The difference lies in the connectivity. Hot wallets are called ‘hot’ because they have an active connection to the internet, this is often the case with soft wallets which are mostly online crypto wallets like browser extensions or mobile crypto wallets such as Metamask or Trust wallet which you can find on the App Store or Google Play. It is this active connection which gives these soft wallets a greater attack surface, there is more room for exploitation when your crypto wallet is right there on your smartphone or browser. Hot wallets are generally more convenient for regular crypto trading, but for those who wish to store their assets long term and periodically accumulate the hot wallet is suboptimal for security reasons.
Cold wallet crypto is not connected to the internet and this tends to be the case with most hard wallets. That is not to say that an online crypto hard wallet does not exist, many can be connected to the internet in order to send and receive deposits but the point stands that cold or hard wallets are mostly disconnected from the internet granting your assets greater security.
Vaultavo Biometric Smart Card
If you are looking for the best hard wallet you need to seriously consider the Vaultavo biometric authentication enabled smart card. The Vaultavo card looks like a traditional bank card, but it is so much more powerful. The Vaultavo smart card is a hard wallet with a small biometric fingerprint scanner that allows you to record your fingerprint and have it act as the seed phrase for transactions and account recovery.Visit our FAQ section to see what other customers have inquired regarding the service.
The best hard wallets before still ran the risk of you losing or forgetting your seed phrase but with the Vaultavo smart card this is a problem of the past. The technology used is a hardware security module chip which is located right on the card for optimal security and as a bonus this card can also work as your bank card.
We hope you have enjoyed our guide to hard wallets and see why cold storage is so important and how it instantly raises the security profile of your crypto assets. If you have been storing your crypto on centralized exchanges, be sure to check out what makes Vaultavo special as an easy-to-use and vastly superior alternative.
This concludes our hard wallet guide. For more crypto related content head on over to our Vaultavo website to access our range of articles where we discuss all the latest and greatest in the world of crypto.
Hard Wallet FAQs
Can you buy a Hard Wallet?
Yes, a hard wallet is short for hardware wallet. Hardware wallets are distinguished from ‘soft wallets’ which is short for software wallets. Naturally, hardware wallets are a physical technology that can be purchased online or at select electronic stores.
Is a hard wallet the safest option?
In general it is fair to say that hard wallet technology has superior security properties that make it more resistant to exploits or hacks than soft wallets. However, it is important to note that a badly designed hard wallet can also be buggy and unsafe and therefore it is a good practice to thoroughly research the hard wallet you intend to buy before you actually purchase it. Hard wallets can also be lost and this is a surprisingly common problem amongst those that go the hardware wallet route and thus in that sense it could perhaps be said to not be entirely safe. Fortunately, if you have your seed phrase stored or memorized you will be able to revive your crypto wallet with the funds safely intact.
Can any crypto be stored on a hard wallet?
No, the specific blockchain protocol on which the crypto token operates must be supported by the hardware device. Be sure to do a background check on your preferred hard wallet to ensure that it supports the cryptocurrencies that you would like to store on it. If you for example buy Avalanche on a centralized exchange you will not be able to deposit it to your hard wallet address if that hard wallet does not support the Avalanche blockchain.