Unit 3 · Level 1 · Self-custody & security
Hardware wallets & cold storage
A hardware wallet is a small offline device that holds your private keys and never lets them leave. Your computer drafts a transaction, the device signs it internally, and only the harmless signed result goes online. Malware on your laptop can watch everything you do, but it can't steal a key it never sees.
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What you get asked
What is the core security promise of a hardware wallet?
Your coins live on the blockchain, not in the gadget. The device guards the keys that control them. Offline keys are out of reach of online thieves.
Order the steps of sending crypto with a hardware wallet.
Notice where the key is used: only inside the device, at step four. The internet only ever sees the finished signature, never the key.
Malware on your computer silently swaps the address you pasted. Why can the hardware wallet's screen still save you?
The device's screen is the one display malware can't touch. That's why the ritual is to verify the address ON the device, every time, not on your monitor.
Never buy a hardware wallet ___, because it may arrive pre-seeded with a thief's recovery phrase.
A tampered device can come with the seed already generated and a card telling you to 'just use this phrase', which means the seller holds a copy of your keys. A real device makes you generate a fresh seed yourself.
Where should you buy a hardware wallet?
Seals can be faked and 'tested' devices can be pre-seeded. Buying direct from the maker is the only way to know nobody touched it before you. €20 saved is not worth your whole stack. 🐜
The rest of this unit
Scams, approvals, cold storage: become hard to rob.