Today I am going to answer a very intriguing question on hardware wallets.
The question is:
- Why should we have two or more hardware wallets at the same time?
For a long time, I was not able to comprehend the benefits of owning two or more hardware wallets at the same time. Moreover, I knew many people who were holding back on owning just one hardware wallet!
For those who don’t know, “hardware wallets” are wallets that keep your private keys offline and away from easily hackable devices like computers and smartphones. If you don’t take care of your private keys, then it just a matter of time until you get hacked. This is because your bitcoins = your private keys. If you don’t own your private keys, you don’t own your bitcoins.
Coming back to our original question …..
Why You Should Order 2 Or More Hardware Wallets
1. To have an extra backup.
Suppose you only have one hardware wallet which is now damaged or has become lost. Luckily, you have not lost your coins because you still have the seed key.
You are now in a hurry to spend your bitcoins, and naturally, you go out searching for ways to restore your wallet using the seed key. You come across the first online wallet you find and input your seed key there. But that wallet wasn’t trustworthy! You’ve just given your seed key away to a hacker, and now, you’ve gone and lost all of your coins!
Alternatively, if you had owned two hardware wallets (like the Ledger or Trezor), then you would have safely and securely configured your seed key and have accessed your restored wallet without any problems.
2. To have two clone wallets.
The second benefit is to have two clone wallets.
But what’s the benefit of this?
Let’s suppose you are holding a huge amount of Bitcoin or other altcoin and you don’t want to risk losing them. That’s why you are extremely cautious and want to keep two hardware wallets that are an identical clone of each other. One wallet you want to keep in your office or home for accounting/safety purposes, and another wallet you want to keep handy with you at all times in case you need to make a quick transaction.
I think this a smart way of handling your funds because you now have ease of access to many places – at home, in the office, or on the go. At the same time, since you have cloned your wallet, you also can use this second one as a backup in case the other one gets lost.
How do you make a clone of your hardware wallet? Follow these steps:
- Use your second device to configure the same seed key that you used when configuring your first device.
- Set a PIN on your second device (the pin can be the same or different for both devices).
Now you have cloned your wallet which will allow you to watch and sign any transaction from either device.
3. To mitigate the risk of storing BTC, Ethereum-based tokens, and altcoins.
This narrative is for all (newbies and advanced users).
We all know that Bitcoin and Ethereum are leading the cryptocurrency market cap list, followed by numerous altcoins (over 800 of them). Each day Bitcoin, Ethereum, and other altcoins are becoming more precious, as is apparent from their rising market caps.
At the time of this writing, the market caps are as follows:
- Bitcoin- $69 billion
- Ethereum- $30 billion
- Other altcoins (including Ethereum-based tokens)- $52 billion
These above facts clearly show that if you are holding any/all of these three categories, then you are holding something very precious. And it is highly likely that all three of these categories will grow leaps and bounds in the future.
So if you are storing your cryptocurrencies on a single hardware wallet, then that is highly risky. It’s risky because you are betting all of your currencies on a single seed key. Suppose you lose that key; you’ve now lost all of your coins.
On the other hand, if you keep your coins spread out through various devices, even if you lose one key, you haven’t lost all of your coins.
Just to give you an example, I would put Bitcoin in one hardware wallet, Ethereum (and Ethereum-based tokens) in another hardware wallet, and other altcoins in another. This way is the best way to mitigate the risk of storing everything under one key.
Check out: Step-by-step guide to storing Ethereum-based tokens on the Ledger hardware wallet
4. For educational purposes.
It is very true that this generation has seen many innovations and inventions, far unlike previous generations. Computers, the internet, and now cryptocurrencies are all things that weren’t even conceivable a mere 50 years ago.
The invention of cryptos started with the pioneering Bitcoin that Satoshi Nakamoto invented. And it is a very well-known fact that any new invention and innovation is bound to face friction from the numerous strata of society. This is what we’re seeing with cryptocurrencies now.
One of the big areas of resistance is the myth around how cryptos are not safe to use. I feel this is because many people just don’t know how to handle and store them securely.
As more and more people get educated about cryptos, the market cap of the industry will continue to rise. This is what we are seeing happening now. So if we are able to teach people about cryptocurrencies and also educate them about how to securely store and use them, then I think cryptos will ultimately come out on top.
In this way, we enable Bitcoin and cryptocurrencies to thrive.
One of the ways through which I contribute to the thriving of cryptocurrencies is through writing on CoinSutra about cryptos in a very lucid manner. Another is by giving my friends a hardware wallet like the one I own (Ledger Nano S or Trezor).
Some of you might think that this must cost a lot to keep giving away free hardware wallets to people. But I don’t worry about the money.
Firstly, my initial investment of Bitcoin and cryptocurrencies have appreciated more than 200%, so I don’t think it is a bad idea to give some of that money back into the crypto ecosystem for educational purposes.
Secondly, even if you were not one of the pioneer investors, you are giving people the opportunity to explore cryptos. This will get them interested and investing, it will get them to tell their friends who will also become interested and investing, and this will ultimately lead to price gains all across the board. This is a direct benefit for you.
I think gifting hardware wallets for educational purposes is one of the best ways one can support the rise of cryptocurrencies.
Popular Hardware Wallets
Now, the question is, which hardware wallets should you own?
You can order them from their official sites using the below links:
If you want to dwell deeper into their functionalities or features and want to know what these hardware wallets offer, then you should look no further than our YouTube channel.
So that’s all I have for you today.
Now I want to hear from you: How many hardware wallets are you using? Which ones do you like the best? Do you have a question about Bitcoin/altcoin hardware wallets? Let us hear your thoughts/comments/questions/concerns in the comments below!
Happy reading, learning, and sharing with the CoinSutra community!
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