Hardware wallet
Also called: hardware crypto wallet · signing device
Definition
A hardware wallet is a small physical device that stores your private keys offline and signs transactions inside the device, so the keys never leave it even when it is plugged into a computer or phone.
This entry is shown in English.
How Hardware wallet works
Well-known examples include Ledger, Trezor and Keystone. You connect the device by USB, Bluetooth or QR code, prepare a transaction in a companion app, and then confirm it with a button press on the device itself. The screen on the device is what you trust, not the screen of your computer.
When you set it up, the device creates a seed phrase. That phrase is the real backup: if the device breaks or is lost, you can restore the same wallet on a new device. A PIN protects the device against someone who picks it up.
A hardware wallet blocks remote key theft, but it cannot protect you from approving a bad transaction. Always compare the address and amount on the device screen before you confirm.
Example
Suppose you want to send 250 USDC to a friend. You paste the address into the wallet app on your laptop. The hardware wallet screen then shows the address and 250 USDC. You notice the last four characters on the device differ from the ones your friend sent you, because malware replaced the address on your clipboard. You reject the transaction on the device, and nothing leaves your wallet.
Common mistakes
- Buying a hardware wallet second-hand or from an unofficial marketplace seller.
- Typing the seed phrase into a computer or website to set up or fix the device.
- Confirming a transaction without reading the address and amount on the device screen.
Learn and practise
FAQ
Do I need a hardware wallet?
If you hold an amount you would be upset to lose and plan to keep it for a long time, a hardware wallet is a common way to reduce online risk.
What happens if I lose my hardware wallet?
Your coins are not on the device; they are on the blockchain. Restore the seed phrase on a new device and move funds if you think the old device and PIN could be used by someone else.