Wondering why you need a hard a hardware wallet?
When it comes to cryptocurrency, security is a big deal - and that’s exactly how hardware wallets can help you.
I’ve written this article because I want my readers to be protected from hackers, malware and malicious software.
Security should be one of your main priorities when it comes to cryptocurrency.
So in this guide, I’ll reveal why you need a hardware wallet.
I’ll also run through some of the disadvantages of hardware wallets, and what you need to be aware of too.
1. What Are Hardware Wallets?
Hardware wallets are basically just a way of storing your cryptocurrency offline - therefore protecting you from hackers and malware.
If you want to access the funds in your hardware wallet, you can simply connect it to a computer via a USB, enter your pin and see your balance.
By the way, if you’re not familiar with hardware wallets, these are basically USB devices encrypted to increase the security of your cryptocurrency holdings. If you’re invested in cryptocurrency long-term, then hardware wallets are a must-have - yet most people still don’t use them.
2. How A Hardware Wallet Works.
Here’s some of the key features of a hardware wallet:
3. 7 Reasons Why You Need A Hardware Wallet.
1. Most Exchanges Aren't Very Secure.
Exchanges aren’t secure and that’s one of the main reasons why you need a hardware wallet.
Because if you’re using one of the biggest exchanges like Binance or Bittrex, you may think that your cryptocurrency is safe. But that’s a dangerous assumption:
Countless cryptocurrency exchanges have been hacked.
Mt Gox is one of most notable exchanges to get hacked - but many, many more have been too. You have to realise that crypto exchanges aren’t regulated - they’re not like banks where you’re guaranteed your money back.
And when these exchanges get hacked, you usually don’t get your money back - it’s gone. Forever!
So if you’re investing long-term, don’t make the mistake of thinking that your crypto is safe just because you’re using a third party exchange.
2. Hot Storage Is A Security Time Bomb.
OK, I know John Mcafee hasn’t got the greatest reputation! However, when it comes down to security, he knows what he’s talking about. He’s basically the original pioneer of digital security.
And as you can see in his tweet below, hardware wallets really are the only safe way to store your cryptocurrency.
Now you can see why you need a hardware wallet:
Because you don’t use one, then it’s not a case of ‘if’ your cryptocurrency will get hacked - it’s a case of ‘when’.
Storing your crypto online is like a ticking time bomb waiting to blow. Do you really want to take that risk?
3. Malware Protection.
Malware is a serious threat when it comes to cryptocurrency.
This is basically software that can install itself on your phone or your computer without you even realising it. When you’re sending cryptocurrency to another wallet address, malware can actually hijack your transaction and send it somewhere else.
This means you can easily lose your cryptocurrency investment - it’s the modern highwayman!
The only protection against this right now is a hardware wallet. These are encrypted to protect against malware, even if your laptop contains a virus.
Hardware wallets like the Ledger actually confirm your destination wallet address before you process the transaction, which you can then double check.
4. Hardware Wallets Are Perfect For Hodling.
If you’re investing for 6 months or more, hardware wallets are a must have.
Most cryptocurrency investors like to HODL long term. If you’re one of those people, then you don’t need to constantly access your crypto and therefore storing it offline is a great option.
Plus, hardware wallets even make it easier to HODL because you won’t be able to constantly play around with your investment.
It’s kind of like storing your money in a swiss bank:
You can simply setup your hardware wallet and leave your cryptocurrency stashed offline without the need to worry about maintaining it all the time.
5. Crypto Hacks Are Rising.
Crypto hacks aren’t just a one-off or a fad.
Cryptocurrency attacks are on the rise and I believe they’re only going to become more and more common.
Well with cryptocurrency becoming more and more mainstream and the rising value of cryptocurrencies in general, hackers are only going to get smarter.
Hackers realise that the ‘average joe’ doesn’t understand how to protect their altcoins. Even more shockingly, there’s still a lot of investors who don’t even add 2FA authentication to their exchange account - let alone know how to set up a hardware wallet.
And because of that, hackers will see newbie crypto traders as easy targets.
6. Peace Of Mind.
The influx of threats to your cryptocurrency is one of the main reasons why you need a hardware wallet.
With the danger of malware attacks, viruses and hackers, a hardware wallet will help you sleep at night. It's the only real way to get complete peace of mind.
It takes a morning to setup a hardware wallet - but the benefits will pay off for years to come.
And everytime you see the headlines of a crypto exchange being hacked, you’ll thank yourself for taking the extra measures to protect your account!
7. Support For Cryptocurrencies.
Most major cryptocurrencies are supported on a hardware wallet so they’re pretty convenient.
For example, on a Ledger wallet, some of the top supported coins are:
Plus many many more!
Now if you’re holding some of the lesser known altcoins, you’re going to find it difficult to get a hardware wallet that supports all of them. That’s because the technology is so new that’s it’s difficult for manufacturers to keep up and implement security protocols when so many coins are being released.
However, hardware wallet teams are constantly updating their software to allow compatability for new coins. And in general, for cryptocurrencies you want to HODl, you won’t have a problem.
Before you buy a hardware wallet, just check the product description to see which coins you can store on there and whether it suits your portfolio.
4. Where To Buy A Hardware Wallet.
I’d recommend buying your cryptocurrency wallet from Amazon because:
5. Disadvantages Of Hardware Wallets.
Hardware wallets aren’t perfect! So if you’re serious about buying one, you need to be aware of the disadvantages too.
Here’s a few disadvantages of hardware wallets to consider:
6. Hardware Wallets vs Exchanges.
If you're using an exchange, you might be wondering why you need a hardware wallet.
And sure, you could store your cryptocurrency online via an exchange - it’s the easy option after all.
Plus I know it’s not always practical to store your cryptocurrency offline. For example, if you’re a day or a swing trader, you’re going to need quick online access to make your trades.
But in the long run, hardware wallets are always going to be safer than exchanges. Also, it’s very rare that a crypto exchange will refund your money after they’ve been hacked. However there are signs of this improving, with a recent Japanese exchange refunding $400 million to their customers.
Here’s why you need a hardware wallet - rather than using an exchange:
7. How To Get Started With A Hardware Wallet.
So now that you know why you need a hardware wallet, it’s time to pick one up - which you can do pretty easily online (there's plenty of reviews).
But please, don’t procrastinate! It’s really not worth the risk of losing your whole investment.
Just imagine all the hours of researching cryptocurrencies, trading and HODLing being wasted simply because you kept putting off buying a hardware wallet!
If you’re going to purchase a hardware wallet, here’s the links to my top three hardware wallet recommendations:
Also, if you want some tips on which hardware wallet to use, check out my guide here.