Coinkite Coldcard
Details and User Reviews 2021

That is not a problem. You can restore your accounts to a new hardware wallet using the recovery key you wrote down when you set it up.

Most wallets support more than just one cryptocurrency, but only generate one backup. Nevertheless, this one backup is sufficient to restore all cryptocurrencies as all private keys of the different wallets result from the seed that is backed up as a backup during setup.

Hardware Wallets such as the Ledger Nano X, TREZOR Model T, BitBox02 or KeepKey all work according to the same principle. They are a special form of a so-called wallet, which is used to manage cryptocurrencies. A hardware wallet is a physical device that securely and inisolationly generates the private keys to the cryptocurrencies. Due to the extra hardware, they have some advantages over software wallets:

• Private keys are often stored in a protected area of a microcontroller and cannot be transferred out of the device in clear text.
• Hardware wallets are immune to computer viruses that steal from software wallets.
• They can be used securely and interactively, private keys never need to come into contact with potentially vulnerable software.
• The software is in most cases open source, so that the user or professionals can validate the entire operation of the device.

However, it is important to understand that hardware wallets are an attractive target for attackers and depend on several assumptions to maintain security. They are not a miracle weapon, and there are several realistic ways to hack a hardware wallet Especially if someone has physical access to the device.

A new cryptocurrency is rarely supported directly by a hardware wallet at the beginning. However, most providers such as Ledger or TREZOR are constantly working to support new cryptocurrencies. Therefore, it is often worth waiting until the desired currency is supported by your hardware wallet.

No, you don’t need the hardware wallet every time you want to make a deposit. It is only necessary to set up the hardware wallet and generate an address of the corresponding cryptocurrency.

Cryptocurrency can now be sent to this address on the desired cycle on a regular basis without the need for the hardware wallet. The address does not expire.

Are my cryptocurrencies stored in the hardware wallet, or where exactly are they? This is a very good question because the answer defines what your wallet actually needs to protect.

Cryptocurrencies are so named because they are secured by cryptography. For this you need a set of digital keys, for example your (very secret) private key. With this key you can encrypt and digitally sign things.

Let’s take Bitcoin as an example (other cryptocurrencies work in a similar way). The entire Bitcoin network is kept up to date by a common data structure called the blockchain. It contains records of all transactions ever made and is publicly accessible online, so anyone can read it. When you receive some bitcoins, say 0.1 BTC, you see them in your bitcoin wallet, listed under a bitcoin address.

At the same time, the bitcoins are not actually stored in the wallet, they are just an entry in the public blockchain. What the wallet stores is your secret private key that belongs to that address. Since you control that private key, you can spend those Bitcoins again: that’s how “Bitcoin ownership” is defined. Anyone can see these bitcoins, but only you can spend it, so they are yours. But that also means that *anyone* with the right private key can spend those bitcoins. Therefore, it is very important to keep this key secret.

What stops the manufacturer of your hardware from using a backdoor and simply stealing your cryptocurrencies? How much do you have to trust hardware wallet manufacturers?

While a completely “trustless” solution is probably not possible, manufacturers are doing everything they can to minimize the need to trust them.

Most of the software code of many hardware waller manufacturers is open source, i.e. publicly available. Anyone can check how the device works and how secrets are handled. Of course, not everyone has the ability to review code: that’s why independent researchers are often encouraged to analyze, and are often rewarded by bug bounty programs when they find something. This does not limit their ability to publish a full independent report without permission.

The essentials to go: A wallet manages your secret private keys and requires full access to them. You can and should demand full transparency about how a wallet works and ensure that independent public audits are encouraged.