Are Hardware Wallets as Secure as You Think?

One of the important topics that are always raised about the storage of cryptocurrencies is that hardware wallets are the most secure type of wallets. However, with the increasing progress of technology, this useful and important tool has not been spared from hackers and thieves.

More security layers and support for different cryptocurrencies and strong encryption are among the important features of hardware wallets. These special tools are designed to keep cryptocurrencies safe from thieves and hackers. The truth is that the security of such devices is not perfect and they may get you into trouble.


Hardware wallets

Hardware wallets often look similar to USB sticks. A hardware wallet is a device that allows you to store cryptocurrencies in a small device.

One of the important advantages of hardware wallets is to provide a type of cold storage; The method used to keep cryptocurrencies away from hackers. As we will mention in the rest of this article, trusting and using a hardware wallet does not necessarily mean guaranteeing the completeness of the user’s asset portfolio.


What are the risks of hardware wallets?

When buying a hardware wallet, you should evaluate the important features of the wallet. You may even need to reconsider the features you want to choose a wallet for.

This means that instead of looking for a wallet with a quality screen or an endless array of cryptocurrency that the wallet supports, look at the way the wallet is updated and the security measures that are built into it.

It should be noted that unquestioning reliance on a person or instrument or intermediary institution to keep capital does not mean complete security and reducing the risk and possibility of losing assets.

Some banks provide their users with physical devices that have a six-digit digital PIN code. The user must enter the digits of this device when logging in to his account or when sending a transaction with large amounts.

Although these devices are physically separated or so-called Air Gap, according to experts, these six digits are not enough to ensure the security of assets and if these numbers, which somehow provide a digital signature, are not generated in an offline environment (without the need to connect to the Internet), endanger the user’s account.

Air Gap of a network or any device means disconnection from other networks and insecure devices to prevent contamination and endangering of vital data in it.

Device encryption is a very important issue, and some cryptocurrency hardware wallet providers use QR codes for transactions. However, when the firmware update of these devices is to be done through USB ports or any other type of connection, its security benefits are reduced.


Consequences of compromising a hardware wallet

It all depends on whether the USB or memory card you are trying to update your wallet with is infected or not.

Laptops are easily infected. If one of these computers is infected with malware, it can be infected with malware or a virus when transferring the wallet firmware update by connecting a card or USB flash drive to the laptop. Therefore, malware can easily get into the hardware wallet and put the user’s capital at risk.

Several similar cases have occurred in devices with well-known brands and with similar conditions. Even though the manufacturers of these devices try to fix such vulnerabilities in their wallets, sooner or later another spear of attack will be pointed at them.


How to secure a hardware wallet?

Some experts believe that hardware wallets should be made completely air gap to properly protect users’ assets. So this means removing any connection from these wallets.

Currently, some companies use a technology called ZeconDual. This technology allows hardware wallet firmware to be updated via QR codes. With this solution, all connections can be easily removed from hardware wallets. Cyber crime is constantly on the rise and shows no signs of slowing down or being eradicated. Devices and data can only be completely resistant to cyber-attacks if all network components and inputs are air-gaped.

Any device that has multiple connections and its manufacturers claim that this tool is impervious to hacking and cyber-attacks, they are hiding behind a false sense of security. It has been repeatedly proven that any device or system that can connect online will be hacked sooner or later; Therefore, using hardware wallets that do not require an online connection can be a good option to use.


The bottom line

In the end, we must say that it doesn’t matter what device or electronic or digital wallet you use, all these tools cannot guarantee your complete security due to the connection and the type and method of updating the firmware. New technologies for hardware wallets are entering the market; But until then, owners of hardware wallets should be very careful with the computers and memory cards they use to connect to their wallets.

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