transactions – Are Hardware Wallets (i.e, Ledger Nano X) Safer than Software-Based Cold Storage Wallets? – Bitcoin Stack Exchange

transactions – Are Hardware Wallets (i.e, Ledger Nano X) Safer than Software-Based Cold Storage Wallets? – Bitcoin Stack Exchange

I’m looking into purchasing Ledger Nano X as a cold storage hardware solution.

What benefits does Nano X (or other hardware wallets) provide over software based cold storage solutions? Why not install a wallet such as Electrum on a device that is not connected to the internet and use it as a cold storage?

I looked at reviews of Nano X and see people mention that it’s sleek, sturdy, has improved display, Bluetooth connectivity and a “killer feel in the hand”. All of this is nice but a cheap laptop with software that supports cold storage will have most of these features, and many others that Nano X is missing.

What kind of benefits does Nano X offer when it comes to the most important functionality – securing + storing your Bitcoin in cold storage?

I did see this answer which points to the fact that with hardware wallets the private key is embedded in the device itself and is therefore less prone to malware attacks.

What this means is that if your computer is compromised with malware,
with a software wallet, that malware can steal your private keys. With
a hardware wallet, because the private keys cannot be retrieved from
the hardware wallet and because the keys are stored on the hardware
wallet, the malware cannot steal your private keys. In this way, your
funds will be safe.

However, doesn’t this mean that:

1) If the hardware device is lost or stolen (don’t forget it’s “sleek and small”) it would impossible to retrieve the wallet as the PK is only be stored on the device itself? (If it can be stored anywhere else you are no longer resistant to malware attacks)

2) Can’t a malicious program siphon funds from the hardware wallet while the device is connected to a computer without ever stealing the PK? Similarly, since every hardware wallet runs some OS, why can’t it be infected when it connects to a computer? Perhaps the PK can’t be stolen but the funds can.

3) If a laptop is always in offline mode (not connected to the internet) won’t this prevent it from being infected in the first place?

4) Also it seems that a device that is specifically designed to store cryptocurrency is the perfect candidate to be tampered with during manufacturing and/or delivery. After all, it’s pretty clear what the device is going to be used for (unlike regular laptops which have other use cases)

This content was originally published here.

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