The security of your cryptocurrencies is an issue that you should definitely take very seriously. Much more so when it is currently more common than you think that crypto scams happen, either with methods such as phishing or injecting malware into your computer.
Today we'll talk about hardware wallets, a small device that will help you keep your keys private, safe and away from the dangers of the world.
What are private keys?
Before getting into the subject, you need to know this term, as it is of paramount importance to understand the operation of hardware wallets.
Private keys have a similar function to that of a conventional key, but with the only difference that these keys are used to unlock your funds and spend them. That's why it's very important that only you have access to those keys and it's obviously not a good idea to use “key1234”.
The ideal solution for storing your private keys is to keep them as far away from the internet as possible. Some people choose to write them down on paper, but let's face it, it's hard to remember a password that looks like this: JBGY43*! Vipl.g4k&5lvj%
To solve this problem, hardware wallets were invented, which we will talk about now.
Are you familiar with hardware wallets?
These wallets are small physical devices that are designed exclusively to protect your private keys inside them. They never connect to the internet, so it's almost impossible for anyone to access them remotely and if someone physically tries to open it to gain access, a protocol is activated that “suicides” the device, eliminating all the information it stores.
In addition to the security offered by not being connected to the internet, some wallets offer the option of a PIN to be unlocked to further increase their security.
Hardware wallets are often used to store large amounts of cryptocurrency, which are not needed for everyday use.
The first hardware wallet
The idea came up with two Bitcoin enthusiasts named Pavol Rusnak and Marek Palatinus in 2011. The concept was to increase user security with a device that was easy to use and above all relatively inexpensive.
Something like a small computer, very compact and that could be used anywhere without the need for internet. In addition, the product should be faithful to the blockchain philosophy and be open source.
After 2 years of development, in 2013 they released “Trezor One”. Since then, Trezor has been one of the most important companies in the cryptoasset security sector, with annual sales of millions of dollars.
How do they work?
To make a transfer from your hardware wallet, you need to first connect it to a computer or mobile phone via USB. It is important to emphasize that the information will never leave the device, because all the processes”important” the device makes them automatically.
Once connected, specific software will open to manage the transfer. There you enter all the necessary data to carry out the movement, such as: the address that receives the cryptocurrencies and the amount to be sent. The software then sends all the information to the wallet and a private key is generated. Finally, the user only has to confirm the payment and the cryptocurrencies will be unlocked and sent.
Recommendations for using a hardware wallet?
When setting up your wallet for the first time, it is crucial that you write your seed phrase on a piece of paper, because if you forget your PIN or your device is damaged, it's the only possible way to recover your cryptocurrencies.
Obviously, that seed phrase should be kept in a safe place and for no reason should you keep it on your computer or phone. Here you should opt for the old, old-fashioned paper technique.
Is it necessary to have a hardware wallet?
The simple answer is yes. It's the best way to keep your savings or large sums of cryptocurrency in a safe place, although you should keep in mind that you're taking responsibility for keeping your money in an impenetrable vault and if for any reason you forget how to access it, you'll join the many stories of people who forgot the access codes to their hardware wallets and lost millions of dollars.
For your everyday expenses, it's best to store your crypto in a wallet that you can access quickly and easily, but without ever neglecting security. The best option for that is to create an account in El Dorado, where you can buy cryptocurrency with your local currency and make payments in a matter of minutes.
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