They say hardware wallets are the safest

[BlackHatCoiner]

Why do they say that? Correct me if I'm wrong. Isn't, hardware wallet, a hardware like usb, that generates private keys without being online on the internet?

Why do I not like them? Because, in addition with a txt file that you can encrypt with many ways and save it in many places, if your hardware stops working, you're a dead man. And you're going to fix it somewhere? Not that recommended. If you're a paranoid of course.

Prove me wrong, by not telling me the cons of software wallet. Prove me wrong, by telling me the pros of hardware wallet.

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[OcTradism]

With hardware wallets, when you use them to send your funds, your private keys will not be disclosed. Even when the computer you use is infected by malwares or viruses.

HD wallets are deterministic ones and from a single seed, you can create many private keys and from a seed you can create many child keys, then grandchild keys. They don't require to have private key to create public keys. It is the point to save you if your computer is compromised. Hackers will not be able to steal your all funds if they can not have access to your private key.

HD wallets offer two major advantages over random (nondeterministic) keys. First, the tree structure can be used to express additional organizational meaning, such as when a specific branch of subkeys is used to receive incoming payments and a different branch is used to receive change from outgoing payments. Branches of keys can also be used in corporate settings, allocating different branches to departments, subsidiaries, specific functions, or accounting categories.

The second advantage of HD wallets is that users can create a sequence of public keys without having access to the corresponding private keys. This allows HD wallets to be used on an insecure server or in a receive-only capacity, issuing a different public key for each transaction. The public keys do not need to be preloaded or derived in advance, yet the server doesn’t have the private keys that can spend the funds.

https://github.com/bitcoinbook/bitcoinbook/blob/develop/ch05.asciidoc

[Sanugarid]

So if it is not the hardware wallet that is the safest 'so far', then what a mobile wallet than can be hacked any time? in an exchange that can be breach any time? I guess not.

There has been some reports that I've read tackling hardware wallets being altered and set up by the seller so they can steal your funds, I don't know how they are doing that by there are cases that funds in hardware wallets is missing.

Aside, hardware wallet should be use like a vault, you don't need to use it daily to avoid implications on the hardware. At the end of the day it is the user's responsibility of anything that he owns.

[Coin_trader]

if your hardware stops working, you're a dead man. And you're going to fix it somewhere? Not that recommended. If you're a paranoid of course.

Do you own a hardware wallet? I believe you some misunderstanding on the way it was used. There is a recovery seed for the hardware wallet in case its stop working. You can access again your old wallet address using the recovery seed by inputting it to the new one. I've been using trezor for almost 5 years and so far it is still running smoothly since I'm not using it on regular basis and will never used it frequently.

Best thing about hardware wallet is you will not worry that someone will get your private key since it was intact on the device itself. So as long as disconnected then your funds is safe.

[BlackHatCoiner]

The reason why the private key can be easily stolen, is one of the reasons why bitcoin will never be a standard currency.

My opinion.

[Charles-Tim]

On hardware wallets, private key is generated offline, public key is used to generate addresses, this is done in a way that private keys can not be compromised or revealed to hackers even while sending or receiving funds

Hardware wallets are created in a way they are malware resistant but it is still good to be careful of the malware as they can change addresses during transaction, as for me, I check and recheck the address I inputed before initiating any transaction.

For bitcoin storage, I prefer airgapped devices, they are the safest as they generate private key offline and no connection at all to the internet. A good example are the two electrum wallets I use, one as airgapped(only for signing transaction through the use of QR code and private is completely offline) and the other one as a watch only that generated the transactions to be signed using QR code.

HD wallets are deterministic ones and from a single seed, you can create many private keys and from a seed you can create many child keys, then grandchild keys. They don't require to have private key to create public keys. It is the point to save you if your computer is compromised. Hackers will not be able to steal your all funds if they can not have access to your private key.

There are many HD wallets that are not hardware wallets, there are online/hot wallets that are HD wallets in which private keys are not generated offline and can be hacked.

[witcher_sense]

Please go through this video first https://www.youtube.com/watch?v=bc3HQqCSl7A

[NeuroticFish]

Why do they say that? Correct me if I'm wrong. Isn't, hardware wallet, a hardware like usb, that generates private keys without being online on the internet?

Why do I not like them? Because, in addition with a txt file that you can encrypt with many ways and save it in many places, if your hardware stops working, you're a dead man. And you're going to fix it somewhere? Not that recommended. If you're a paranoid of course.

Prove me wrong, by not telling me the cons of software wallet. Prove me wrong, by telling me the pros of hardware wallet.

1. Hardware wallets are not the safest. A correctly configured cold storage is safer. But hardware wallets are close enough to optimum between safety and every day convenience.
2. Hardware wallet signs the transactions. A txt file cannot do that without a wallet.
3. Hardware wallet works based on a seed which is recommended even by the manufacturers to write down after first generating it. That seed works in the same way in most wallets and will also work in a new hardware wallet too, so destroying your hardware wallet is not the end of the world.

All in all your points against hardware wallets are invalid and there are pluses too.

[o_e_l_e_o]

Following on from your posts in this thread (https://bitcointalk.org/index.php?topic=5259587.0), it seems that you do not understand what a seed phrase is, what it does, and why you should use one.

Because, in addition with a txt file that you can encrypt with many ways and save it in many places, if your hardware stops working, you're a dead man.

This is absolutely not true, and is the entire reason that every good hardware wallet tells you in big capital letters to back up your seed phrase. If your hardware wallet dies, breaks, gets lost, is stolen, etc., then you just recover from your seed and you won't lose a single satoshi.

The reason why the private key can be easily stolen, is one of the reasons why bitcoin will never be a standard currency.

Can you explain why you think private keys can easily be stolen? They can only be stolen if you are careless with them, such as backing them up in text files like you suggest in your opening post.

[Darker45]

1. If your hardware wallet stops working, your funds are safe.
2. If your hardware wallet is lost, your funds are safe.
3. If your hardware wallet is stolen, your funds are safe.

All for as long as you still have your seed with you.

[joniboini]

There are literally dozens of threads, posts, and articles that talk about hardware wallets, its pluses and minuses compared to other wallets, and when and why you should use it. I don't think you need to make a new threads and challenge people to change the way you think.

[Lucius]

Why do they say that? Correct me if I'm wrong. Isn't, hardware wallet, a hardware like usb, that generates private keys without being online on the internet?

Maybe people say that because it's true, but not everyone will agree that it's the safest way. Maybe you should try to find some of the most important features offered by hardware wallets compared to online, desktop or mobile wallets so you would understand the difference. But here are a few positive things that make me use a hardware wallet.

- generating a seed is done via device, and seed is only visible on device screen which is not the case with any desktop or mobile wallet where your seed can be exposed to any malware which is currently present on the device.

- some hardware wallets use secure chip (Ledger devices), which makes a big difference from storing your crypto on a regular USB stick.

- hardware wallets are not only for storing, but making transactions in the safest way possible protecting the user from himself, in the sense that he must check all the parameters of the transaction before sending.

But any way to store cryptocurrencies, no matter how secure, is not resistant to human stupidity - and that includes hardware wallets. People lose their money because they do not know how to use the means at their disposal, but this is a problem that goes beyond this discussion.

[20kevin20]

I usually had a pretty hard time trusting any wallet that I had to download offline. For example, there was a time I used to generate paper wallets but I was very paranoid every single time no matter how safely I generated them.

Hardware wallets basically removed this fear - with Ledger, you just open up Electrum (or Ledger Live) and you generate as many accounts as you wish without having the constant "what if some stranger knows it" fear. Moreover, carrying it in your pocket is safer than carrying a wallet around, as long as you stored your Ledger seed properly. Losing your wallet means losing everything you had in it while losing a Ledger means recovering your funds when you get back home. It's not like you can insert a random code inside a software and get back your lost ID, cash, cards etc.

Being offline, you don't have the fear that a keylogger might get to unlock your software wallet and get your funds out either. Although it might not be the most secure wallet, HWs avoid the hassle and constant stress of possibly not doing something right and having all your funds flush out of your addresses. This is mostly why I love my Ledger. Think of it as a mini & handy airgapped device you can conveniently carry around in your pocket.

The reason why the private key can be easily stolen, is one of the reasons why bitcoin will never be a standard currency.

My opinion.

It's easily stolen from some people because they do not have the necessary education to know how a digital wallet or file can be safely protected from hacks and thefts. With every new generations, it'll be easier and easier to get them understand why Bitcoin is better than centralized currencies and why it's such a genius idea. After all, you should store your keys the same way you store your precious metals or other valuable stuff you have.

[sunsilk]

if your hardware stops working, you're a dead man.

No, you are not.

You probably don't know that you can import your seed from a hardware wallet to an Electrum wallet. To easily understand it, you can easily connect your wallet from that hardware even if it's broken with the use of Electrum wallet.

[seoincorporation]

...

Prove me wrong, by not telling me the cons of software wallet. Prove me wrong, by telling me the pros of hardware wallet.

I would lie to prove you are wrong, but this time you are right, even a EMP can destroy those hardware wallets. And tons of vulns and exploits have already been developed for that kind of wallet.

The 100% secure wallets don't exist, there is always a way to vuln the system, some of them are a little more secure but that doesn't make it not vulnerable.

[danherbias07]

I only know the basics, and I am not as deep as our veterans here. 
So I will just use that.

A hardware wallet is downloadable or you could just save a clear copy if you want to. The .exe file or whatever it is that had not been used yet.
That means, you could use it offline if it is saved in a flash drive.
Create your address, save your private keys and seeds without the need of the internet.
It's better if your seeds are written in a piece of paper.

Now, your computer is compromised.
You just use the flash drive to open the hardware wallet again. Note: You haven't input your seeds yet. It is still in that piece of paper.
Enter that while offline then Voila! you can access your account again.

You don't really need the hardware for the whole run.
You just need it in the starting line and finish line.

[BlackHatCoiner]

@o_e_l_e_o

Can you explain why you think private keys can easily be stolen? They can only be stolen if you are careless with them, such as backing them up in text files like you suggest in your opening post.

And what bad do encrypted text files have? Like txts in rars. In a PC that no one ever touched you download Winrar and add to archive the csv file of the private keys. You put a very strong password that can remember. And you save it to different places with a name that isn't suspicious.

@Darker45

1. If your hardware wallet stops working, your funds are safe.
2. If your hardware wallet is lost, your funds are safe.
3. If your hardware wallet is stolen, your funds are safe.

All for as long as you still have your seed with you.

So.. Same thing with software wallet? But you have to be careful.

@sunsilk

You probably don't know that you can import your seed from a hardware wallet to an Electrum wallet. To easily understand it, you can easily connect your wallet from that hardware even if it's broken with the use of Electrum wallet.

And why would you like to import your seed to electrum since you have the strong hardware?  

[20kevin20]

I only know the basics, and I am not as deep as our veterans here.  
So I will just use that.

A hardware wallet is downloadable or you could just save a clear copy if you want to. The .exe file or whatever it is that had not been used yet.
That means, you could use it offline if it is saved in a flash drive.
Create your address, save your private keys and seeds without the need of the internet.
It's better if your seeds are written in a piece of paper.

Now, your computer is compromised.
You just use the flash drive to open the hardware wallet again. Note: You haven't input your seeds yet. It is still in that piece of paper.
Enter that while offline then Voila! you can access your account again.

You don't really need the hardware for the whole run.
You just need it in the starting line and finish line.

You got it entirely wrong as far as I am concerned. Hardware wallets are not downloadable. They're literally pieces of hardware.

If you're referring to apps such as Ledger Live, these are just wallets to check balances and initiate transactions with the HW. You could use a lot of other apps and sites, including Waves DEX, Binance, Electrum, Magnum Wallet etc. There is no need to save anything anywhere besides the seed your Ledger shows during the first-time setup. You just write that seed down and store it somewhere safe.

Private keys are usually not scrapped from the Ledger for security reasons. As long as you have the seed, it's enough to recover all your balances.

Even with a compromised computer, the HW is known to be safe - while the PC's screen might fool you, the hardware wallet's won't. If the PC is infected so that the transactions only show to be correct while in reality the destination wallet is a thief's, your hardware wallet will always show the real destination one and requires your physical input to confirm or decline the transaction.

But besides checking wallet balances, you basically need the wallet the entire time. You have to confirm addresses, transactions etc using it.

And what bad do encrypted text files have? Like txts in rars. In a PC that no one ever touched you download Winrar and add to archive the csv file of the private keys. You put a very strong password that can remember. And you save it to different places with a name that isn't suspicious.

Disk failure. I always fear that scenario. Another concern I personally have is that a vulnerability might be found someday for encrypted archives and my money would just suddenly be transferred into another wallet just because I held my seed/wallet.dat in an archive and someone got in touch with it. I don't trust digitally stored personal stuff.

And why would you like to import your seed to electrum since you have the strong hardware?  

That is in case you lose your hardware wallet like you said and cannot purchase another one for replacement. You can simply recover everything using your seed, or just buy another wallet. Ledger has 3 PIN tries before it automatically resets, so in case you lose it you'd need someone who knows what a Ledger is who also knows an unknown physical vulnerability in order to have it compromised. Otherwise, you could lose 10 HWs with the same seed on them all and you'd still be perfectly fine.

[sayulita]

if your hardware stops working, you're a dead man.

No, you are not.

You probably don't know that you can import your seed from a hardware wallet to an Electrum wallet. To easily understand it, you can easily connect your wallet from that hardware even if it's broken with the use of Electrum wallet.

I guess the OP says that if you don't have the backup of the wallet then you are dead, well that's with every wallet out in the market as well, if you are using the software wallet then also you are prone to attacks and your funds can easily be stolen by a hacker or the person having physical access to your wallet as compared to a hardware wallet where funds are more secure than a software wallet and always is password protected by default.
Also I didn't knew about the importing of key from a broken hardware wallet to electrum wallet, should it be from a backup or we can also extract the key from the broken hardware wallet??

[Benefactor]

The protection of hardware wallets is much better. It is in a much better position than software wallets. Hardware wallets keep your money safe at all times. Even if you lose your wallet, your entire money will be perfectly safe.