What Is A Hardware Wallet?
A Bitcoin hardware wallet is a dedicated device for generating and storing private keysWhat Are Bitcoin Keys? Bitcoin keys are randomly generated strings of numbers and letters that are used to send bitcoin and/or verify ownership of a bitcoin address with a digital... as well as signing bitcoin transactions in a secure offline environment.
What distinguishes hardware wallets from mobile wallets, desktop wallets, and lightning wallets is that hardware wallets store your private keys in a secure component of the device that is not capable of connecting to the internet on its own.
To send a transaction with a hardware wallet device, you must either link it to a secondary internet-connected device or use a totally air gapped method for signing transactions such as a partially signed bitcoin transactionWhat Is A Bitcoin Transaction? A Bitcoin transaction is the transfer of bitcoin from one address to another address or when new bitcoin is created. Transactions can also be the... (PSBT).
Why Are Hardware Wallets Important?
Hardware wallets provide a level of security that desktop, mobile, and lightning wallets simply do not have. They do not connect to the internet by themselves because they do not have any kind of antenna like Bluetooth, GSM or WiFi. They are essentially “dumb devices” that are only able to connect to other web-connected devices.
Some wallets offer support for BIP 174 which allows for bitcoin transactions to be signed entirely offline and then the signed transaction is transferred to an internet connected device via an SD card or a fountain QR code.
Hardware wallets also do not have operating systems of their own so they are immune to attacks that would attach themselves to software wallets such as desktop wallets or mobile wallets.
Hardware wallets are the most secure method of protecting your bitcoin because you can generate your seed phrase entirely offline and sign transactions without ever having to connect to another device.
The Best Hardware Wallets
When you need a secure place to hodl your bitcoin, you want the most trusted names in the industry. The hardware wallets listed below have a proven track record of providing the highest levels of security, functionality, and privacy for their users.
Not all hardware wallets offer the same functionality, so be sure to do your own research before you decide to buy or build one.
SeedSigner (DIY)
SeedSigner is a bitcoin signing device that allows users to generate and store private keys offline. It is a DIY project that uses a Raspberry PiWhat Is A Raspberry Pi? Raspberry Pi (Ras Pi) is a credit card sized single board computer that was first developed in the United Kingdom by the Raspberry Pi Foundation.... Zero 1.3 board and other hardware parts that can be found at hobbyist electronics stores or on Amazon. The SeedSigner uses fountain QR codes to relay information between the device and your desktop walletWhat Is A Desktop Wallet? A Bitcoin Desktop Wallet is a bitcoin wallet that runs on a desktop/laptop computer and provides the highest level of functionality for building and broadcasting..., which allows you to send and receive partially signed bitcoin transactions.
ColdCard
ColdCard by CoinKite (Affiliate) is a unique hardware wallet design that has taken a super simple approach to hardware wallets. They have made the simplest device without all of the expensive design elements of the outside. In the name of transparency and the spirit of open-source, the ColdCard is has a clear casing so you can see all of the inner workings of the device.
The ColdCard is a unique device since it has support for BIP 174 which allows for partially signed bitcoin transactions (PSBT).
OPENDIME
OPENDIME by CoinKite (Affiliate) has taken a different approach to hardware wallets. Instead of creating a device that is able to send and receive payments all on its own, OPENDIMEs are able to generate a single bitcoin addressWhat Is A Bitcoin Address? A Bitcoin Address, or just Address, is a 26-35 character ID for receiving bitcoin. Most bitcoin addresses begin with 1, 3, or bc1 but there..., Once an address has been generated and some satsWhat Is A Satoshi? A Satoshi (sat or sats for short) is the smallest unit of a bitcoin. 1 Satoshi is a hundred millionth of a BTC (1 sat =... have been sent to the device, the entire OPENDIME is meant to be exchanged as a sort of bitcoin bearer cash instrument.
OPENDIME keeps the private keys in a secure and separate part of the hardware and in order to reveal the private keys, the device has to be irreversibly damaged. Once the OPENDIME’s private keys are revealed, the device is no longer usable as a bitcoin bearer device. You can either throw away the device or you can keep it to generate key pairs but in an insecure way.