How Does a Crypto Hardware Wallet Work?

Ever wonder if you need a crypto hardware wallet? If you have a bit of cryptos hanging in the cloud or some app, it might be the time to put your crypto in your own pocket. After all, this is what cryptos are meant for! I.e. a democratization of banking. When you hold your own crypto and not allow an institution to hold it, you take control of your assets. The security is much higher as it is not prone to the massive hacking that can affect even large crypto institutions. A hardware wallet is offline so this makes it orders of magnitude harder to hack because they must physically take your 24 seed words from you to gain access to your assets. Watch the video to learn how easy it is to get started with your own hardware wallet.

How’s it going everybody this is btw bush today i’m going to talk about how a hardware wallet works and how you can get started in it first of all i’ve owned kryptos for several years now including a little bit of bitcoin a lot of dogecoin and i’ve always wondered about hardware wallets because i keep on hearing it is more secure than keeping all of this on a website

Somewhere before i begin i’d like to thank ledger which provided me with this ledger nano x hardware wallet without them sending it to me i would not have been able to produce this video now cryptocurrencies are stored on a distributed ledger which is kind of like who owes what how much coin is in each wallet and all of this is in a distributed nature so everybody

You know there’s multiple copies of this and the network always tries to verify each other so it’s really hard to forge something like this and in order to gain access to one of the wallets and say okay i want to use this wallet to send some coin somewhere else you need some kind of key and this key is the secret to accessing your cryptocurrencies when you use a

Hardware wallet it’s not like you put your bitcoins or dogecoin inside this wallet and if you lose it you’re gonna lose it forever the way they make these wallets is that it holds the key to your crypto that is secured on the network your crypto resides on in the cloud somewhere across all these different computers that has copies of the ledger itself some people

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Might have like 10 000 bitcoins a lot of money in one of these things and if you lose it this is a huge deal which makes you feel like if you have a hardware wallet you don’t want to carry it around right because if you lose it you don’t want to lose everything that you have but this is not the way these things work if this hardware wallet is lost or stolen and

Some random guy goes and opens it up right and then press the button and go okay how do i access this and let’s say they have one of these as well they know how to use it but the first thing that comes up is it asks you for a pin code without the pin code you cannot do anything with this wallet you cannot access all the stuff that’s inside and let’s say you lose it

And it was stolen by a sophisticated hacker that knows how to hack hardware this is what they say there is a low risk that if your device is lost or stolen an experienced hacker with engineering skills who has access to the physical device could extract the recovery seeds usually with these crypto devices with security minded devices they have built-in chips that

Have security protocol in it that it’s going to hide a bunch of information within the chip itself so it’s not like you can like rip open the chip and then go and probe it or something even within the chip itself it is encrypted as well so you absolutely need the pin code in order to even start anything so when you lose this device you don’t lose all your bitcoin

Or dogecoin you have a copy of these 24 word seeds you have to write this down somewhere and they give you three cards to write these 24 words and you’re supposed to keep them secure and these cards is your actual wallet if you have access to these cards or if someone stole these cards then yes they can access your cryptocurrencies if you actually lose a hardware

Wallet it’s not that big a security breach you can actually wait a while wait until your hardware wallet comes it has a new recovery seed and then you import all of those assets from your old wallet that you lost into your new wallet so you can think of this as your crypto assets goes with this 24 word recovery seed if you are kind of nervous about having your

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Cryptos hang in midair without you having a hardware wallet you can actually get a software wallet and then import all of those assets in your software wallet just for the time being and then when you get your hardware wallet you re-import them again and just go and put them into your hardware wallet there is a pin code if you enter in your pin code wrong three

Times it’s going to wipe the device and then it’s as if you have a brand new wallet over here it doesn’t know anything about anything so you’re gonna have to start it new again and then use your 24 word recovery seed and then put those assets back in here i have some dogecoin in coinbase i have a lot of dogecoin in uh robin hood which right now they don’t have

Wallets yet i’m like number 957 000 or something but when they do have wallets i can be certain that i can just transfer as much as i want from robinhood into this little hardware wallet thing but for now i can do it with coinbase which has a address of you know my dogecoins and then i can just take the address from this thing and then go on my coinbase send

It to the address over here and you know i sent 50 dogecoins the network fee is actually 1.44 doge this equates to about 30 cents or so for me sending about 11 so this is a little high it’s like 3 or so it also said the payment will be receiving an estimated about six hours but um in my experience when i sent it from coinbase into my hardware wallet the time it

Took was almost instantaneous so i didn’t even have to wait an hour or two it just appeared right away now when i received this device i was kind of nervous right because i’m on the internet and i don’t want some random person hacking this device beforehand and then sending it to me so i was a little nervous there about using this that’s also why i only put

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A little bit of dogecoin in there at first the way to get a little bit more confidence is that ledger is a company in france so hopefully this package is arriving from france and not somewhere in the middle of russia or somewhere so i got that check and also when i plugged this in it also have a little check mark next to the ledger nano x over here and it says

The device is genuine so i need to trust ledger in that they have some way of you know verifying the authenticity of this thing that it has not been tampered with so this check mark is another thing that can help uh prove to yourself that this thing is legitimate and that you know you’re not getting hacked or conned out of your hard-earned cryptocurrencies they

Do have a cheaper version than this ledger nano x version they have the ledger nano s which is 59 this one is 119 you have to install apps to make it compatible with certain cryptocurrencies so whichever ones that you need to use you add those apps in here one thing i did notice is that this thing has two megabytes of storage you don’t need that much storage in

Order to store 24 words the ability to secure something that’s inside so that it’s very hard to hack that’s where the cost comes from when you have the hardware wallet it works in conjunction with an app on your phone if you want to receive bitcoin or dogecoin then you can show the other person your qr code and then they can do the transaction that way or if you

Want to buy something you can use your app scan the qr code of the merchant that you want to pay and then you can pay with your wallet right now not a lot of merchants will accept dogecoin so there are places where you can look up a map and it will show you which merchants accepts it once dogecoin becomes more widely accepted yes i’m gonna go out there and and

Spend my dogecoin a little bit more if you guys are interested in getting a ledger nano x or s check out my referral link down in the video description below thanks for watching you

Transcribed from video
How Does a Crypto Hardware Wallet Work? By BeatTheBush

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