When it comes to safely and securely holding Bitcoin, nothing comes close to the security that a hardware wallet can provide you. In a world that saw over a billion dollars worth of cryptocurrencies stolen in hacks and frauds in 2022, the importance of holding your Bitcoin private keys in self-custody has never been higher.
If you are new to the world of bitcoin, some of these phrases mean nothing to you and that is ok! Stick around until the end of the video and you will be able to understand what it means to secure your own bitcoin with confidence!
Let’s start from the top. What is a Bitcoin Wallet?
In order to be protected from fraud and thefts. Bitcoin must be withdrawn off the exchange that you purchased it from and onto a Bitcoin Wallet. There are two types of Wallets, there are hot wallets which hold your bitcoin on the internet, and cold wallets which hold your bitcoin on a device, known as a hardware wallet.
Hardware wallets are specifically designed to encrypt and safely store your wallet’s seed phrase password in a device that is disconnected from the internet. The risk of holding your bitcoin in a hot wallet is that a computer hacker could break into your account from halfway across the planet and drain your wallet of your Bitcoin.
Using cold wallets makes it difficult for scammers and hackers to steal your funds unless they physically hold the device. Additionally, each cold wallet is secured with a PIN, a passphrase, or 2FA, which makes it even more difficult for fraudsters to break into your wallet without your knowledge.
Most hardware wallet brands are used with a companion application on your computer that can trade, swap, stake, and perform other functions within these apps, giving cold wallets the same functionality as hot wallets while also providing extra security.
Given the recent meteoric rise in the price of bitcoin, there is a good chance that you’re probably holding more bitcoin that you would feel comfortable losing. So, to avoid losing sleep at night, stay tuned for the next section where we break down some criteria to keep in mind when choosing a hardware wallet.
