If you can afford crypto, you can afford a hardware wallet.
TL;DR: A USB drive can only act as storage for your keys and leaves you open to attack whenever you access it. A hardware wallet has your private key within it, never exposes that key, and requires physical confirmation to send a transaction.
Oftentimes you?ll see myself, another MyCrypto team member, or just some random person in the industry telling you to get a hardware wallet.
And oftentimes we hear the following:
- Hardware wallets are too expensive.
- I don?t have enough cryptocurrency to make a hardware wallet worth it.
- Why can?t I just use a USB drive?
Some of you might be fine without a hardware wallet. And that?s okay if you?re okay with putting yourself at risk. But sometimes risk turns into actual loss ? we?ve spoken to plenty of people who opened up their wallet one day to see that their life savings turned into no savings. And a lot of times it?s because they stored their cryptocurrency improperly.
The point is that having a hardware wallet is a good idea. But instead of just trusting me, I?ll explain why a hardware wallet is so special? and why a USB drive is not so special.
MyCrypto.com and the MyCrypto Desktop App are very hardware wallet friendly!
Hardware Wallets
A hardware wallet is by far the best solution for sending and storing cryptocurrency securely. Why?
They are built JUST for this purpose. They?re built with secure elements and custom software, and their job is to keep your crypto safe.
Sending a cryptocurrency transaction requires you to ?sign? that transaction with your private key. Signing a transaction proves that you?re in control of the private key that is attached to the address (public key) that you?re sending from.
This means that at some point before sending a transaction, you?ll need to input your private key. Some people type it. Some people copy/paste it. That?s not safe. Some people use a hardware wallet. That?s safe.
A hardware wallet is unique because your private key is stored directly within the device. You never see it, and you never type it. When signing a transaction with your hardware wallet, you physically press a button on your hardware wallet to confirm ? thus erasing the potential of manually inputting your private key into a phishing website or having a keylogger copy it.
With a hardware wallet, nobody gets exposed to your private key ? not you, and not a potential thief.
Knowing that your secrets are safe within the hardware wallet helps provide ease of mind when traversing the crypto world.
Q: What do I do if somebody gets control of my hardware wallet?A: Don?t panic, don?t rush. Nobody can access the funds on your hardware wallet unless they also have your PIN. Find the recovery phrase that you wrote down and hid when you first set up your hardware wallet, and access your funds using that recovery phrase with the MyCrypto Desktop App. Then, transfer your funds to a new wallet, and keep the recovery phrase for that wallet safe until you order a new hardware wallet.
Q: What hardware wallet should I get?A: There are a few great, affordable options that we recommend:
- Ledger Nano S is currently $60.
- Trezor One is currently ~$90.
- KeepKey is currently $80.
If you purchase one of these, we appreciate it if you use the affiliate links above.
Q: I can?t afford a hardware wallet. Can I PLEASE use a USB drive?A: If you must use a USB drive, use it only for temporary cold storage. Read the ?USB Drives? section below for more info.
Q: Okay, I got a hardware wallet. What now?A: Hooray! First, check out this great guide and follow the directions on properly backing up your hardware wallet. Then, use your hardware wallet safely and securely with MyCrypto.com and/or the MyCrypto Desktop App.
USB Drives
A USB drive has many uses in the non-crypto world, and almost everyone knows how they work. You can use one to share a file quickly, store something offline, as a recovery drive for your computer, and much more. It does its job well. But it isn?t for crypto.
Using a USB for your crypto is bad news. Look at this evil guy. He?ll steal your crypto!
A USB drive is not secure for sending transactions because a USB cannot sign a transaction for you, unlike a hardware wallet. A hardware wallet has the private key stored directly within it and does not expose that private key. However, signing a transaction ?with? a USB drive would require you to go into that USB drive, copy/paste your key from a file, and sign your transaction that way. This opens up about a million different attack vectors and is not a good way to go about things. A USB drive can simply hold a file that holds your key. And that?s it.
A USB drive is generally not useful nor safe for cryptocurrency ? but if you have no other solution then you can use a USB drive as cold storage.
How to use a USB drive as crypto cold storage
If you have no other way to store your crypto securely offline, a USB drive is a good short-to-mid-term alternative. All you need to do is take your private key/seed phrase/JSON file, or other form of key, and save it on that USB drive. For extra security, encrypt that USB drive. Make sure you have multiple copies of your keys in different locations ? you don?t want one point of failure.
Now, go hide that USB drive and don?t touch it, look at it, or even think about it. This is a decent solution to secure an amount of cryptocurrency that you don?t plan on using. But even then, a USB drive?s hardware can fail over time, even if you never use it, so it?s still better to get a hardware wallet.
Q: What do I do if somebody gets a hold of my USB Drive?A: You need to act quickly. If you have another copy of the private keys/seed phrases/JSON files, access them ASAP via the MyCrypto Desktop App and transfer them to a new wallet that only you have access to.
Conclusion
In conclusion, you should really get a hardware wallet if you have cryptocurrency and want to be as secure as possible. There are always attack vectors to be on the lookout for, such as man-in-the-middle attacks and fake/compromised hardware wallets (always buy directly from the company, never use a site like eBay). A hardware wallet is not guaranteed safety, but a hardware wallet and some vigilance is the safest bet for you.
If it?s literally impossible for you to get a hardware wallet, then you can use a USB drive to help store your cryptocurrency.
More Reading
- Protecting Yourself and Your Funds
- Hardware Wallet Recommendations
- Why You Should Back Up Your Hardware Wallet
- What To Do After You Get Your Hardware Wallet
- Ledger 101: Why are Hardware Wallets Secure?
Talk To Me & Share Your Thoughts
- Discord
- Medium
- GitHub
- Help & Support
- Peepeth
- Press Inquiries
