Hardware wallet
A small device that creates a wallet's private keys, keeps them offline and signs transactions inside itself, so the keys never touch a computer or a phone connected to the internet.
A hardware wallet works with a phone or a computer, which prepares a transaction and passes it to the device. The device shows what’s being signed on its own screen, you confirm with its buttons, and only the signature comes back. Malware on the computer can’t copy a key that never leaves the device, which makes it a common form of cold storage.
When you set one up, it shows you a seed phrase, 12 or 24 words that can rebuild its keys on any compatible device. Whoever has the words has the money, so a hardware wallet on its own is still a single point of failure.
The device also has to be what it claims to be:
- In July 2026, Coinkite disclosed that a firmware error, present since March 2021 in some of its Coldcard devices, had made the seed phrases they created far weaker than they should have been. According to TRM Labs, attackers took about 1,816 bitcoin from more than 5,200 addresses.
- In October 2026, Ledger confirmed a hidden chip in a device sold by CryptoBilis, a reseller it had authorized in Malaysia, Indonesia and the Philippines: it read the 24 words off the screen and sent them out over the mobile network. Researchers put the losses at up to 93 million dollars, from more than 300 wallets; Ledger hasn’t confirmed a total.
And buying one leaves a record of who bought a crypto wallet and where it went. In December 2020, a database of 272,852 Ledger customers, with their names, email addresses, postal addresses and phone numbers, was published on a hacking forum. The guide on hardware wallets, multisig and collaborative custody weighs the options, and the one on wrench attacks covers the threat no device stops: someone forcing you to unlock it.