The BitSmart Wallet device is two small computers in one package. One computer connects to the internet via WiFi and is used for generating and broadcasting transactions. This is the "hot device." The other computer is the "cold device" which stores encrypted copies of all of your private keys and is used for signing transactions. The cold device is never connected to the internet, which keeps your coins safe from hackers and thieves.

The two devices communicate with each other via a shared Database, where transactions are prepared for broadcast to the Bitcoin network. This system of isolation prevents hackers from remotely installing wallet-stealing software on your machine and accessing your private keys. Private key encryption also keeps your Bitcoins safe if your BitSmart Wallet device is ever lost or stolen.