The most secure bitcoin wallet: why is hardware trusted more?

The most secure bitcoin wallet: why is hardware trusted more?

Cryptocurrency in spite of its virtual essence is no different from material money, so it should be stored in the safest bitcoin wallet. This service must meet a number of requirements, be strong and reliable, so that cybercriminals can not access the key which is their goal since it opens the possibility of carrying out transactions. Simply put robbers can send your bitcoins into their accounts and nothing will help you to give money back.

About BTC wallet

Wallet is the storage area for public and private keys, as well as bitcoin addresses. By means of the wallet users perform operations and accept cryptocurrency even without an internet connection. But this possibility depends on the type of wallet. Wallets also provide access to full information about transactions and additional keys.

Hackers are aimed at obtaining private keys. Key is secret information represented in the form of a cryptographic signature. It is created with the help of complex mathematical mechanisms. Keys are kept on the user’s computer, the special hard wallet memory, on a remote server or presented physically, i. e. printed out as a document. Such papers are called paper wallets.

Types of the wallets and their security level

To understand which wallets are the safest we should know about the basic principles of their functioning and main types.

Online wallets imply storing keys on a remote server, so they are considered to be the most unreliable. So we cannot consider such a service as the most secure bitcoin wallet. However it does not mean that you can not store money in them. To access the keys one must enter a password. Internet services are quite suitable for small amounts and payments. Online wallet is quickly registered without unnecessary complications, which is very convenient for beginners.

Programs to install on your computer hard drive are more trustworthy. There is a large selection of soft for Windows, MacOS and Linux. In view of the features soft wallets can be full (thick) and light (thin). The first ones are more reliable than the latter because the keys are stored only in the computer memory. However it will take time and considerable space on the hard disc to install the full program itself and the whole history of the blockchain.

Hard wallets are compact devices that look like a flash memory. They are considered to be the most reliable areas for key storage, but unlike the online and soft analogues, the devices will have to be purchased. Such models as Trezor, Ledger Nano S and KeepKey at the beginning of 2018 are thought to be the safest hard wallets. A compact case, a screen and instant connection to a PC characterize these products. In terms of security the following advantages of the safest bitcoin wallet can be distinguished:

  • The key is stored inside the device and can not be removed
  • Operations are performed inside of the wallet
  • The transaction information is displayed on the screen
  • To confirm the action one must press a physical button
  • Users can create a backup key
  • Hard wallets are additionally protected by PIN code
  • Devices do not allow installing third party applications
  • They can used on any computer safely

Anonymity as another protection step

Money from time immemorial has been linked with the state. The entire system was controlled and is still watched by the appropriate authorities. Hiding income or money operations was and remains unreal. Cryptocurrency in general as well as bitcoin in particular gave the opportunity to reconsider concept of money and financial transactions. Anonymity attracts virtual cash users first of all.

A priori bitcoin transaction is anonymous and not tied to the identity of a user. The address is generated by the random selection method as well as the private key, so no personal information is provided. But not every time a new address is created, and data about its owner may well become public for example after a purchase in the online-shop, donation, etc.

Full anonymity is a subject of lively interest therefore tireless work is being done by programmers to provide it. One of the best anonymous bitcoin wallet nowadays is Dark Wallet. The authors of the project brought into life the CoinJoin technology which is able to anonymize transactions. It combines a user transaction with other random operations so that it is impossible to find the source and final addresses.