How do crypto wallets work?
In the crypto world, we are able to create our own bank by generating what we call a private key which is a string of alpha-numeric characters such as “E9873D79C6D87DC0FB6A577863338953213303DA61F20BD67FC233AA33262”. This private key essentially acts as the ‘Master Password’ for your entire bank account, allowing a person to authorize any kind of transaction with it. As such, if your private keys end up in the wrong hands, you have basically given up all control over your funds in that account. Therefore keeping your private keys safe should be your utmost priority while navigating the crypto world.
In this article, we will explain why using a hardware wallet is the safest way to secure and store your cryptocurrencies such as Bitcoin.
What are the different threats?
There are many web/mobile based bitcoin wallets out there in the market in which they will help you generate your own private keys to create your own crypto bank account. The problem with this is that if your private keys are stored on a computer or exposed to the internet, they can easily be hacked and accessed by viruses and all your money can be wiped out in an instant.
In the infamous Mt Gox incident, 850,000 bitcoins worth $450,000,000 at that point in time were stolen because hackers managed to gain access to a compromised computer belonging to an auditor of the company. They utilized their access to the exchange to alter the value of bitcoin to one cent and obtained the private keys of Mt Gox’s customers whose crypto assets were kept in hot wallets (e.g. any cryptocurrency wallet that is connected to the internet). These hackers then used these accounts to sell all their bitcoins at this artificially reduced price which they were then able to buy up in bulk.
In many cases, hackers using malware installed on a target’s computer or mobile phone was able to swap out your intended recipients bitcoin address to an address controlled by the hacker.
The solution to these problems is to use a hardware wallet such as the Corazon. One of the basic premises you adopt when using a hardware wallet is that the computer and everything else connected to the internet might be compromised. Thus, the Corazon generates your private keys offline in the device which never leaves, as such they can never be exposed to the internet or any viruses that your computer has.
Similarly, you can use the touch screen display that the Corazon has to physically approve transactions that you want to send by pressing a button on the device. More importantly you can verify your recipient’s address on the Corazon which is isolated from your computer, allowing you to perform transactions securely to the intended recipient.
What if i lose my hardware wallet?
You’d probably be asking by now, what if i lose my Corazon, is the money gone? The answer is no. During the set-up process, you would have to do a back-up of your private keys represented by a recovery seed which are 12 random words that you would write on a piece of paper. When you lose your Corazon, you can simply buy another one and input the recovery seed in the new device to have everything set back up. As mentioned previously, once you have your private keys you have full access to the bank account and it doesn't matter whether the physical hardware wallet is lost or not. Point being, do not lose your recovery seed!
Most beginning crypto enthusiast will leave almost all of their crypto assets on their exchange such as Binance for the sake of convenience of making trades. While that is understandable, you should know that your assets are not entirely safe as you are merely entrusting this exchange with your private keys and mandating them to serve as a safeguard. History has also taught us that even the best and most reputable exchanges can get hacked. A recent example would be the Binance hack of over $40,000,000 worth of Bitcoin in May 2019.
In conclusion, the famous crypto saying “Not your keys, not your Bitcoins” has never been more real. Bitcoin and cryptocurrencies might have given us the freedom to be our own banks, but doing so comes with a new set of responsibilities and that is knowing how to keep your funds safe. To do that, using a hardware wallet is your best bet to safely secure your Bitcoins and cryptocurrencies.
The Corazon is a daring experiment in mechanical and technological artistry by the Trezor and GRAY® families designed to reflect the excitement of the cryptocurrency revolution. These hardware wallets are built upon the software and electronics of the Trezor Model T and housed in an aerospace grade titanium case CNC machined by GRAY®.
The GRAY® brand, founded and based in Singapore, owes much of its distinctive character to the city that they call home. Inspired by the technologically advanced city-state, GRAY® was born to be the periscope into the future, to inspire those who will shape it. Rebels at heart, GRAY® 's designs have no history as their heritage is the future, their creations are daring experiments in mechanical artistry, engineered with the most advanced technical materials possible. To date they have created the most exclusive and luxurious tech accessories for the iPhone, Samsung & Macbook, cryptocurrency hardware wallets, and a range of daily accessories such as writing instruments and card wallets. They have been featured prominently on Business Insider, The Verge, Bitcoin.com, Hypebeast, Highsnobiety, Unbox Therapy and many more publications.