Why should I use hardware wallet

[Oshosondy]

I will like these questions to be answered. Why using hardware wallet?

1. Is hardware wallet malware resistant?
2. Is our funds totally safe on hardware wallets?
3. As none of the hardest wallet not hacked before?
4. If I use hotwallet like electrum, does that mean my funds will be stolen?

If have $500 to hold, which wallet is more perfect. I will like your explanation.

I think electrum wallet is still good for this, I have been using it for over a year now, nothing happpened to the wallet.

[TryNinja]

1. Is hardware wallet malware resistant?

Yes. That's the main reason people buy them.

2. Is our funds totally safe on hardware wallets?

Nothing is totally safe, but considering that your hot wallet (your daily wallet used in an online device) can get stolen if you get a malware, you can say they are a lot safer.

3. As none of the hardest wallet not hacked before?

There has been some vulnerabilities. But, AFAIK, in all of them, a third party would need to get physical access to your device and know exactly what he is doing to get your coins. And they were all fixed after discovered. Keep in mind that the $5 wrench attack would most likely be more efective by the attacker in this case.

AFAIK, they have never been hacked like your conventional wallet (through the internet, easily, with malware, etc).

4. If I use hotwallet like electrum, does that mean my funds will be stolen?

Of course not. No one would use Electrum if that was the case. If you know what you are doing, don't download random sh*t on the internet, save your backup seed in a safe place and have good security measures, then you most likely won't ever get hacked. But you can't compare the level of security between a hardware wallet security and a hot wallet like Electrum.

If have $500 to hold, which wallet is more perfect. I will like your explanation.

Personally, I think $500 is already enough for you to consider paying $60+ in a hardware wallet. It depends on you. Do you think it's worth the extra security? Are you going to buy more crypto later?

I used Electrum for many years before buying my first HW and never got my coins stolen. If you know your way through security, a hot wallet isn't really a bad deal.

[XCANA]

Holding huge funds that could make you temporarily uncomfortable if lost should be kept in hardware wallet. Hackers has been on a rampage of huge funds in wallet, those who have such funds are potential target for their exploits. For anyone to safeguard his funds is advisable to use hardware wallet than any other wallet around. But, for saving small funds, I would suggest anyone to use electrum or Exodus wallets.

[hugeblack]

I think electrum wallet is still good for this, I have been using it for over a year now, nothing happpened to the wallet.

Any well developed open source wallet, if it is created in an air-gapped environment and there is no physical connection to the device, it is considered relatively safe. Hardware wallet enable you to create this setting even if you do not know much about how to safty your crypto wallet.

As for the minimum amount for buying hardware wallet, it depends on whether the amount of $ 500 is considered to be too expensive in your opinion or not.
In general, hardware wallets are a good way to save money that you do not want to use on a daily basis, on the near average, or once every few months.

[Coyster]

4. If I use hotwallet like electrum, does that mean my funds will be stolen?

Let me add something, there's no wallet you'll use that you'll be sure to lose your funds, for example, even if you choose to use a custodial wallet, an exchange wallet for example, you could go many years without losing your funds (nor the exchange hacked). That being said, doesn't mean your funds are actually safe, you're just lucky so far. Your coins are not safe, you've just not lost them yet.

What I mean is electrum hot wallet is perfect, and it's a non-custodial wallet, but if you want extra security and also want your coins offline (cold storage), getting a hardware wallet is your best option, you could also use a different (new or newly formatted) device to hold your funds (a device that should never be connected online) if you can't get a hw wallet.

2. Is our funds totally safe on hardware wallets?

See: Getting a hardware wallet doesn't mean your funds are completely safe

[bakasabo]

If you have a hardware wallet means you have the key to it. Have you ever heard "Not your keys, not your Bitcoin" ?
If you hold your funds on an exchange or on online wallet, everyday you are under a risk of loosing them. Online wallet or exchange can suddenly disappear, their offices can be raided by police and their wallets can be arrested. Last but not least - with hardware wallet you select the transaction commission and there are no hidden or misleading fees.

[mk4]

4. If I use hotwallet like electrum, does that mean my funds will be stolen?

Of course not. No one would use Electrum if that was the case. If you know what you are doing, don't download random sh*t on the internet, save your backup seed in a safe place and have good security measures, then you most likely won't ever get hacked. But you can't compare the level of security between a hardware wallet security and a hot wallet like Electrum.

If have $500 to hold, which wallet is more perfect. I will like your explanation.

Personally, I think $500 is already enough for you to consider paying $60+ in a hardware wallet. It depends on you. Do you think it's worth the extra security? Are you going to buy more crypto later?

I used Electrum for many years before buying my first HW and never got my coins stolen. If you know your way through security, a hot wallet isn't really a bad deal.

Totally 100% agree. I'm just going to add a bit more emphasis on this part.

Hot wallets aren't really that bad, assuming you actually know what you're doing; and the fact is, it's just better for A LOT of people to just grab an affordable hardware wallet from Ledger/Trezor than to gamble away their security. And the fact that you're asking about these things(kudos to you for asking questions by the way), might be enough proof that it's better for you to just go the hardware wallet route. Juuust to be extra sure.

[Charles-Tim]

If you have a hardware wallet means you have the key to it. Have you ever heard "Not your keys, not your Bitcoin" ?
If you hold your funds on an exchange or on online wallet, everyday you are under a risk of loosing them. Online wallet or exchange can suddenly disappear, their offices can be raided by police and their wallets can be arrested. Last but not least - with hardware wallet you select the transaction commission and there are no hidden or misleading fees.

On online wallet, that does not mean you can not have your private key. There are two types of online wallets, noncustodial wallets have private keys. Electrum above is totally a noncustodial wallet that have its own private key. Although, the person can make use of electrum for such if he has the experience to avoid malware and hackers. But, it is still not wise enough, holding such amount on online wallet truly still make the fund less safe. Getting harder wallet will be the best option.

On hardware wallet, the private key is completely stored offline, they are resistant to malware, they are the safest to use with more of convenience. But, it should still be known that no wallet is 100% safe, some malware can still penetrate hardware wallet that can steal bitcoin from the wallet. So, we still need to emphasize on the fact that despite hardware wallets are the safest to use, there should still be 100% avoidance of malware for safety.

[o_e_l_e_o]

[And they were all fixed after discovered.

Slight correction: There exists an unfixable vulnerability with Trezor devices which allows an attacker with physical access to the device to extract the seed phrase. If you are using a Trezor device, you must use a long an complex passphrase (or ideally, multiple passphrases) to protect against this.

On online wallet, that does not mean you can not have your private key. There are two types of online wallets, noncustodial wallets have private keys.

Even if you are using an online wallet which allows you to extract your private keys or seed phrase, you have no way of knowing that you are the only person who can extract your private keys or seed phrase. The provider could very well have given you pre-generated keys/seeds which they have stored somewhere else, or they can access your account and view them, or their encryption method is poor so they can be intercepted when being transferred, and so on.

All web wallets are a bad idea.

[bakasabo]

On online wallet, that does not mean you can not have your private key. There are two types of online wallets, noncustodial wallets have private keys.

Even if you are using an online wallet which allows you to extract your private keys or seed phrase, you have no way of knowing that you are the only person who can extract your private keys or seed phrase. The provider could very well have given you pre-generated keys/seeds which they have stored somewhere else, or they can access your account and view them, or their encryption method is poor so they can be intercepted when being transferred, and so on.

All web wallets are a bad idea.

Agree. Life has taught me to be the first and only creator of a wallet. Dont want to feed any intermediary anymore.

Online wallet could give me the only for my wallet, but what about change address (or I dont know how to call it correctly, the address that hold some of your funds after you made a transaction). I dont even know the address of it until I make a transaction.

[Lucius]

Hot wallets aren't really that bad, assuming you actually know what you're doing; and the fact is, it's just better for A LOT of people to just grab an affordable hardware wallet from Ledger/Trezor than to gamble away their security.

The same goes for any hardware wallet, because if someone thinks that by purchasing such a device he has ensured complete security, then he is greatly mistaken. What definitely distinguishes a hardware wallet from a desktop/mobile/online crypto wallet is that such devices generate seed (private keys) in a secure isolated environment of the device itself - and that for each action the user must confirm it by pressing a physical button on the device, which means it gives us the ability to protect ourselves from malware that wants to deceive us in any way.

Considering how many users of hardware wallets have become victims of fraud (clipboard malware, fake wallets asking for seed, hardware wallets with pre-generated seed) we can conclude that those who are not fully familiar with what they do, have almost the same chances to get hack no matter how they store their crypto.

[Pmalek]

If you have a hardware wallet means you have the key to it. Have you ever heard "Not your keys, not your Bitcoin" ?

To be precise, you don't have the private keys to it. They are stored on the safe element of the device and you can't access them. The device uses them to sign for your transactions but you don't see them. But you have a seed that was created in a safe environment of your hardware device. It was never shown in a software, displayed on your computer screen, or given to you in a digital form.

[Darker45]

Hot wallets aren't really that bad, assuming you actually know what you're doing; and the fact is, it's just better for A LOT of people to just grab an affordable hardware wallet from Ledger/Trezor than to gamble away their security.

The same goes for any hardware wallet, because if someone thinks that by purchasing such a device he has ensured complete security, then he is greatly mistaken. What definitely distinguishes a hardware wallet from a desktop/mobile/online crypto wallet is that such devices generate seed (private keys) in a secure isolated environment of the device itself - and that for each action the user must confirm it by pressing a physical button on the device, which means it gives us the ability to protect ourselves from malware that wants to deceive us in any way.

Considering how many users of hardware wallets have become victims of fraud (clipboard malware, fake wallets asking for seed, hardware wallets with pre-generated seed) we can conclude that those who are not fully familiar with what they do, have almost the same chances to get hack no matter how they store their crypto.

Exactly! It is not as if you could say, "I know nothing or very little of crypto wallets and so I would just go for a hardware wallet to avoid any problems." You should actually know what you are doing regardless of which particular wallet you use, cold or hot, web or desktop or paper or mobile or whatever.

Hardware wallets are not safe havens for those who are lazy, less knowledgeable, careless, and negligent crypto owners. Even with a hardware wallet, it may only take one false move before all your funds are gone. Knowledge, at least the basic, is prerequisite in crypto. The type of wallet you use doesn't make up for it.

[Imran232]

1. Is hardware wallet malware resistant?

Yes ofcourse, this is the main reason i personally use hardware wallet.

2. Is our funds totally safe on hardware wallets?

Since last 2.5 years i am using my wallet still i am not facing any type of money loss. Actually i use it very carefully when i am trying to check fund or sending someone my money i personally check that is my furewall system work or not. Then before installing any software i always try to install only officials software any type of crack version is not safe for computer. Plus i didn't save my seed to my computer i write it on my physical note book. Which is truely needed. I hope if people follow all this then everyone's fund are safe.

3. As none of the hardest wallet not hacked before?

I do not have any idea about this. If you use any type of third parties centralized exchange instead of most secured hardware wallet then you can think which wallet has more risk to hack. None of the crypto decentralized wallet can say that they weren't hacked. So in this point of view it dosen't matter what happen before.

4. If I use hotwallet like electrum, does that mean my funds will be stolen?

I do not think so because its all upto you that will you choose hardware wallet or hot wallet electrum. Look both are decentralize Both has your own control. But electrum is hot wallet so there is a little bit risk. But hardware wallet has full of your control remember that. Otherwise i won't compare each other because both are best from their site.

If have $500 to hold, which wallet is more perfect. I will like your explanation.


I think electrum wallet is still good for this, I have been using it for over a year now, nothing happpened to the wallet.

It is all upto you if you think you can continue with your 1 year positive experience then you can. Otherwise it dosen't matter hoe much money need to use hardware wallet if you think your invested 1 cent is much valuable for you then you can use hardware wallet.  there is no rules that if you have huge money to hold then hardware wallet is for you.

[bob123]

If you have a hardware wallet means you have the key to it. Have you ever heard "Not your keys, not your Bitcoin" ?

To be precise, you don't have the private keys to it. They are stored on the safe element of the device and you can't access them.

The meaning of that statement is not whether you, as a person, can actually see the private key.
It is about whether you (and only you) have full control over the private keys.

And with hardware wallets, this is the case. While you (usually) don't actually see the private key (a user shouldn't handle private keys anyway, that's what the wallet software is for), you are the only one in possession of them.
This is meant when people say "not your keys, not your coins".

[HCP]

If have $500 to hold, which wallet is more perfect. I will like your explanation.

I think electrum wallet is still good for this, I have been using it for over a year now, nothing happpened to the wallet.

This is no one "perfect" wallet... everyone's use case is different... for some people, hardware wallets are the ideal solution as the afford a good combination of security and convenience (ie. being able to transact "easily" while maintaining high levels of security)... for some people, paper wallets (securely generated offline) are the way to go if they just want to HODL and aren't transacting often... air-gapped setups are great for those who value security above all else and can live with the "hassle" of setting up and maintaining the system and aren't bothered about convenience etc... and for "some", a web wallet is probably the best tool (ie. small amounts, no personal hardware/need to use public computers etc).

Then we get to you and your theoretical $500... given the cost of a hardware wallet (or a 2nd pc for air-gapped setup)... that is going to cut into your holdings by a fair amount... in this situation, a software wallet like Electrum, that has been downloaded, verified and setup properly on a PC that isn't used for "dodgy" purposes (torrents/free porn/cracked software etc) is likely to work perfectly fine... as long as you pay attention to what you're doing.

However, you must then balance what that $500 means to you... What would the loss of that $500 mean to you? is that like a weeks wages? a months wages? your life savings? depending on your answer to that question, you can begin to assess what level of security you need to protect that asset.