Hardware Wallets: The Way To Interact With The Fintech Industry
In a time when the Fintech industry is growing at such a rapid rate, more and more people join every day. However, with the new investors come cyber attacks, hardware, phishing sites, hackers, etc. Hardware Wallets help provide security along with being great tools when navigating through Blockchains. They are convenient because they provide security, organization, and even wallet-to-wallet trading among others.
How Hardware Wallets work:
When working with hardware wallets it is important to remember that cryptocurrencies are never stored in the wallet itself. The wallet just stores your private key. This key opens the blockchain address to where your assets are stored. This allows the convenient fact that you can access your tokens anytime and anywhere because the blockchain is everywhere.
Benefits of Using A Hardware Wallet:
The hardware wallet is considered cold storage, a form of offline storage, as they mitigate the risk of your assets being compromised by an online attack along with being immune to viruses. Another added benefit is that when you are “signing” and confirming a transaction, a hardware wallet makes it so that without your private key it is near impossible to forge the signature. This leads many people to argue, “What if someone gets a hold of my hardware wallet?” Even if someone gets access to your hardware wallet they will be unable to access your private keys because the wallet is built so that they need a pin and an optional passphrase to unlock the wallet.
Faults of the Hardware Wallet:
Of course, anything with benefits must also have faults and the hardware wallet is no different. Unlike some malware that you may find on a PC, the hardware wallet will not stop you from being tricked into sending crypto to the wrong address. Along with the technical faults, any piece of hardware also has hardware problems. The problems with the hardware wallet are similar to any piece of hardware. They may have imperfect implementations and compromised shipping and production processes. The best way to avoid this is to buy an authentic device made by trustworthy experts. The best hardware wallet companies currently are Ledger and Trezor.
The biggest downside to hardware wallets is the fact that they only keep private keys safe and create spending transactions; they are unable to tell you what coins you have received.
What This Means For The Future: In an era where the trading of crypto is increasing in popularity, more people will start to attempt to steal for their gain in monetary value. Hardware wallets provide a secure environment to create spending transactions rather than online where many viruses or hackers may access your online portfolio.
Picture Credits: Investopedia