Security above all
Understanding hardware wallets
We will never get tired of insisting on: “Not your keys, not your Bitcoin!”
To make this mantra a reality, we must have the self-custody of our Bitcoin, which means never leaving them in the custody of a third party, such as an exchange or broker.
And even if you have bought bitcoins using any of such services, the next thing you should do is withdraw them immediately to your custody. After all, the possibility of owning your Bitcoin is one of its main characteristics, unlike fiat digital money, which can never be self-custodial and must always be housed in a centralized custody entity (bank, fintech).
What better security for our bitcoins than offline key generation and storage?
We must take all the necessary measures to keep our Bitcoin safe. As we know, good care of our private keys is crucial as far as security is concerned, but we must be aware of how these keys are generated. The level of entropy used for such generation should be as high as possible, and this often entails certain technical complexities.
In general, when we are dealing with small amounts of money, we entrust the key generation to the software wallet we are using since we consider that the level of entropy handled by that software is high enough to provide us with a sufficient degree of security for the amount we will store in the wallet. But remember that in Bitcoin matters, what we consider little money today can become a lot of money over time, so it would be a good idea to start using a device specially designed for the key generation with high entropy and offline storage capabilities. This is where hardware wallets come into play.
Hardware wallets are electronic devices similar to a flash drive but specially designed to generate keys ultra-secure way with high entropy, granted by their chips explicitly created for that function, and capable of storing keys securely without exposure to the internet.
Nowadays, many devices of this type are designed with different configurations and forms of operation. Some use memory cards to transfer data between the wallet and the computer or the device responsible for issuing transactions to the network. Such wallets are known as air-gapped. Others use this same approach, but instead of memory cards, they use a camera and a screen to read and display QR codes with the necessary information to perform the transactions. There are also wallets with Bluetooth connection or the ones that need to be physically wired.
Those who have accumulated substantial capital in Bitcoin will be interested in investigating multi-signature wallet arrangements made up of several hardware wallets. This method of safekeeping Bitcoin is the most secure available now but requires some technical knowledge to perform it correctly.
Super security is what Hardware wallets offer, and we should consider acquiring one of them once our Bitcoin holdings become relevant. Although the price may seem a bit steep at first glance, given these devices’ security, it is worth the investment.
We always advise our users to use hardware wallets for greater security in storing and managing their Bitcoin.
To make the interaction with the Hardware wallet and our platform easier, together with Invity, we have launched the integration with Trezor, the first hardware wallet manufacturer on the market. Now you can complete your Hodl Hodl deals directly from your Trezor wallet via the Trezor Suite app.
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