How Does a Crypto Hardware Wallet Work?

Ever wonder if you need a crypto hardware wallet? If you have a bit of cryptos hanging in the cloud or some app, it might be the time to put your crypto in your own pocket. After all, this is what cryptos are meant for! I.e. a democratization of banking. When you hold your own crypto and not allow an institution to hold it, you take control of your assets. The security is much higher as it is not prone to the massive hacking that can affect even large crypto institutions. A hardware wallet is offline so this makes it orders of magnitude harder to hack because they must physically take your 24 seed words from you to gain access to your assets. Watch the video to learn how easy it is to get started with your own hardware wallet.

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[evracer]

The way I think of it is this. A hardware wallet is like a key box at a car dealership. You buy the key box (hardware wallet) and that key box has a lock on it (seed phrase) with a blank key. When they send it to you, there is nothing of value in the box, and the key to the key box is blank, so the manufacturer of the key box could never give someone a key to your keybox because it hasn't been cut yet. During setup of the hardware wallet, you cut the key to the wallet. Meaning that you are the only one in possession of that key.

You now have a key box (wallet) that only you have a key to. NOW you can start putting the keys to the cars (your crypto) in the key box. The cars are out on the lot, and unless you have the keys to the cars, along with the car, they are safe. Each car (crypto address) has it's own key. So unless you have the right key, for the right car, you can't unlock it and steal the car (crypto).

Now imagine that the cars are invisible, and that the owner of the dealership takes the locked key box home with him and no one knows where he lives....and he's got the only key to the key box. That's self custody. If he leaves the key box at the dealership with it unlocked....he is trusting the salesmen with the keys to all the cars. That's what happens when your crypto is on an exchange. If every goes well, all is fine....unless your salesman is SBF and he decides to give the car keys away to his friends. Not your keys, not your crypto.

[ianhotchin]

The 2mb storage is to allow you to install apps on to it. You need an app to allow it to recognise a certain type of crypto. The cheaper ones have less memory so you can only install up to 6 or so different apps therefore 6 different types of coin. This one allows you to manage up to about 100 coins. The memory isn't to store the 24 word phrases.

[MBey-keqq]

That was a great breakdown. Thanks so much!

[tolpropertiesllc]

Great video! Thank you for the detailed information!

[ND]

So if your cold wallet only stores your keys and it has its own keys that you have to store somewhere, then how is it different than having hot wallet and storing its keys ?

[martirjd]

Can it connect to both a computer or/and a phone? A cabled connection or by Bluetooth or by both?

[RvdB]

So what is the differents between the 24 words on paper compared to a paper wallet ?

[olivergroves]

Been thinking about getting one of these thanks for the advice!

[alexdasliebe]

@1:26 Gestures wildly saying “on the cloud” … 🤣👍🏼 … just like everyone does.

[trippy]

each to their own (as it should be). why not just write your seed phrases of all your wallets in a notepad. then encrypt the file in a container . and encrypt as many times you want containers into containers (like Russian dolls) - and then put on any usb and hide it ? chances someone even knows what the encrypted file hidden in (limitless) containers is next to none. Thanks for the video tho :)

[ardissaps]

So hardware wallet is basically a Key for our Cloud asset that help us access it without logging in input phrase etc on such metamask or any wallet? And the masterkey is the Word manually written in paper or somewhere?

[davidm]

Everything is on the blockchain. Your crypto doesn’t reside on the wallet. If your passphrase is compromised your hardware wallet is worthless.

[Brotherman]

I bought a ledger on ebay back in 2017 to keep my bitcoin on. Looking back now that was a stupid thing to do. But I haven't had any issues with it.

[horsepoweravenue]

Will this protect my crypro from an exchange going under? And does it still make money if i take ot off an exchange like coinbase?

[homegirlsuccess]

2024. Ledger asked all users to Update versions their COLD wallet otherwise u cannot use it.

How is that cold? When THEY know ur keys and how much you have.

[boscodog]

Can a hardware wallet be used to purchase things with Bitcoin if I don't own a cell phone?

[LukeMackaman]

So how is a hardware wallet any better than just writing your private key down on a piece of paper if you're writing your 24 seed on a piece of paper anyway?

[dashman]

So is your key stored on the wallet or the coins itself?

[dadofarkhamknight_bs]

Just wanted to say that the main hero in squid games looks like you!

[xhulio]

but if you can use it from the app, then does it not become an online wallet?