Letter #217: Your Hardware Wallet Is Only As Good As The Company That Makes It

Read now to learn how a direct connection to the internet severely limits the security of your hardware wallet.

Dear Readers,

Public key cryptography is one of the key technologies that enables Bitcoin to be secure, unstoppable money. It matches a public key, which can be used to identify you pseudonymously across the blockchain, with a private key that completely protects your Bitcoin and other blockchain-based data, as long as you keep the private key safe. Suffice it to say that Bitcoin would have likely failed long ago if not for the safety enabled by public key cryptography.

Conversations within the Bitcoin space, especially after the disaster that was 2022, often revolve around the best ways to protect your private keys, and thus protect your Bitcoin. Quite a number of Bitcoin users, especially those who are newer to the space, have elected to forgo protecting their private keys altogether, instead entrusting the task to exchanges, Bitcoin banks, and other custodians, who promise to keep their Bitcoin safe (but don’t always deliver on that promise). An ever-increasing number of people are deciding to take it upon themselves to protect their private keys, and thus remove 3rd-party risks from the equation to a large degree.