Hardware wallets are physical wallets that help to secure digital assets like cryptocurrencies and non-fungible tokens.
When the pandemic hit two years ago, the world economy came to an abrupt halt and prompted people to turn to cryptocurrencies. As a result, the shift in financial habits contributed to the popularity of digital currencies, NFTs, and other niches. Simultaneously, the demand for hardware wallets grew, hitting an all-time high of approximately US$3 trillion in market value in 2021. Analysts predict that the global hardware wallet market may cross US$870 million in 2026.
Let’s take you through how a hardware wallet works, its benefits, and security features.
How Does a Hardware Wallet Work?
Unlike software wallets, hardware wallets are offline and disconnected from the internet. They store private keys, which provide access to your address on the blockchain. If you’re not sure what that means, an address essentially represents your spot on the blockchain network. It holds all your assets and transaction details. The hardware wallet merely stores the private keys to those addresses.
You can connect your hardware wallet to a system whenever you want to make a transaction. After plugging in your hardware wallet, the system will request authorisation from the wallet before it completes a transaction. Once the transaction is done, you can disconnect the hardware wallet from the system, and it will disconnect from the internet. Staying offline keeps it safe from malicious hackers looking to steal private keys and crypto-assets.
There are several hardware wallets in the market that offer secure storage of private keys. The UKISS Hugware® is one example of a hardware wallet. It comes in a pair of cryptographic key devices, with one acting as a Rescue-Key so users won’t need to keep lengthy recovery phrases. The Authentication-Key is the handy tool for coin holders to plug into their devices whenever they need to manage their assets.
Why are Hardware Wallets More Secure Than Software Wallets?
Hardware wallets aren’t always connected to the internet, whereas software wallets are. This means that software wallets are more vulnerable to cyberattacks and hacks than hardware wallets.
The hardware wallet also protects private keys with a PIN, which adds an additional layer of security. So even if a hardware wallet is stolen, the person possessing it will not be able to access your private keys unless they have your PIN.
This makes hardware wallets much less prone to malware and phishing attacks. Hence, the chances of your private keys being stolen are significantly less.
Other Benefits of Hardware Wallets
Besides security, there are other benefits of owning a hardware wallet.
Hardware wallets can work with multiple blockchain networks, allowing you to manage all your assets from one place.
The wallet is usually pocket-sized and convenient enough for you to use on the go. You merely need to plug in the device to your laptop when you want to perform a transaction. Once the transaction is complete, you can unplug it.
Hardware wallets also allow trading directly between wallets. Users can send or receive assets directly between two wallets, without an intermediary.
If you’re looking for a hardware wallet, UKISS is launching our Hugware hardware wallet soon. Other than being a crypto wallet, it also helps to encrypt confidential files, videos, photos, and backup when used with our Suite of Digital Security Applications.
Be the first to use it by registering your interest, here.