Here's Why Hardware Wallets Aren't Enough to Secure Your Crypto

Francisco Memoria

Cryptocurrencies have allowed people throughout the world to be their own bank, and own their own money, but they come with a major caveat: your funds are your responsibility, so you have to ensure they’re secure.

Keeping cryptocurrencies safe is hard work. So hard that according to studies conducted by blockchain analysis firm Chainalysis, 4 million bitcoins are believed to be lost forever. These are worth a whopping $19.9 billion at today’s prices.

In the industry, cold storage solutions are seen as the best answer, as they allow users to keep their funds offline and away from hackers who may be trying to compromise them. There are two main ways to store private keys offline: through hardware wallets and through paper wallets.

Addressing the paper wallets first, we know there are plenty of problems with them because they’re made out of paper! This means they can accidentally be thrown away, damaged, or even lost. Keeping thousands of dollars worth of crypto this way should, at the very least, make users feel uneasy.

Hardware wallets, on the other hand, are safer, but at the end of the day are glorified USB memory sticks with several security add-ons stopping hackers from getting to them. Electronics, however, don’t last forever and in the long run they’re susceptible to malfunctioning, software failures, and exposure.

How Hardware Wallets Can Fail Us

While hardware wallets are the go-to solutions in the crypto space, they’re a temporary one. Keeping funds offline through them works against hackers and or own mistakes,as they stop us from accidentally clicking the wrong link, entering the website, or revealing information to the wrong person.

Yet let’s say we want these funds to be secure throughout our lives, and passed on to those we love when we’re no longer here. Several flaws come to mind: the software may no longer be usable, the pin codes needed to access the coins may have been forgotten, and natural disasters may completely destroyed the hardware.

Fires, floods, and earthquakes, for example, can completely destroy a hardware cryptocurrency wallet, potentially leading to a loss of funds. While paper copies of the seed and pin codes can be kept safe in various locations, paper deteriorates over time, even by simply being exposed to the environment.

Maintaining various pieces of paper in safe places throughout a lifetime sounds like a faulty plan, and extreme measures like these are reserved to potential bitcoin billionaires like the owners of the Gemini exchange, the Winklevoss twins.

In an interesting article, Wired editor Mark Frauenfelder detailed that he lost $30,000 worth of BTC over flaws in these two systems: his paper copy of the seed phrase was thrown out, and he forgot his pin code. Lucky for him, a months-long crusade to recover the funds saw him pay a security expert nearly $4,000 to help him crack his hardware wallet – through a now-fixed vulnerability.

Metal Seed Storage Devices Are The Solution

For the average HODLer to keep his or her funds safe there’s an easy-to-use solution: metal seed storage devices. These are essentially an upgraded version of paper wallets, made out of material that doesn’t deteriorate easily, and can survive natural disasters like fires or floods.

Since these don’t deteriorate easily, they allow users to keep HODLing for decades without worrying about the state of their cold storage wallets. Over the years, several materials have been tested, in order to find something that would be affordable, and yet able to withstand corrosion, high temperatures, and more.

In a Medium post published by bitcoin engineer Jameson Lopp, it’s clear the search wasn’t easy. CRYPTOTAG, a cryptocurrency security firm, has however been able to find the answer, and is currently creating space graded titanium wallets for cryptocurrency users.

These can withstand temperatures up to 1,665°C (3,029°F), are corrosion and erosion resistant, and have “bullet stopping power.” Adding to that, they’re compatible with Ledger, Trezor, and KeepKey hardware wallets.

To help crypto users maintain their financial legacy without worrying about complex storage solutions, CryptoGlobe has partnered with CRYPTOTAG to elevate the security standard of the crypto space.