Core Question

Are hardware wallets as safe as everyone says, and what are the risks associated with them?

What are hardware wallets?

Hardware wallets are essentially wallets where your private recovery key is never exposed to the internet. That means that your probability of a malware or malicious script on your device stealing it and accessing all your accounts generated from that key is virtually zero, unless you either expose it online or share it, which you should never do, or if the hardware wallet had malware already installed.

Understanding the benefits

The benefit and why people love then for storing large amounts of crypto for a HODL strategy is pretty straightforward. By having a wallet that has never been connected to any sort of internet or anything is almost bulletproof against attackers. They allow you to store your private key behind you pin or password, all offline and disconnected. That also means that say someone somehow gets your pin or password. They can't access the funds until they have physical control of your device.

In fact, Strategy, heavily utilizes cold storage for its massive 844,000 bitcoin (roughly). This just shows how much cold wallets are used for securing assets.

Downsides

Of course, the world is not all flowers, so obviously there are downsides. The major downsides are that they are more expensive upfront, have a learning curve, and slow transaction times start to finish. You might pay say $100 for a mid tier hardware wallet, and you need to learn how it works, how to connect, and how to use it. That takes a lot of time, compared to someone who just wants to have a wallet with easy, fast, and convenient access 24/7. 

Final reflection

Overall, hardware wallets/cold storage are an absolute must. They allow you to store your crypto safely, or at least safer than a hot wallet. The top two are Ledger and Trezor. 

And, I know some of you will be asking, "When do I get one? At how much crypto?" My answer to that is, if you are the kind of person that will feel sick or angry even at losing $0.10 worth of crypto, then I would highly recommend a hardware wallet no matter. However, if you aren't that way, then, I would recommend getting one as soon as you have a few hundred dollars worth of crypto. That way, you keep yourself safe and relaxed, free from too much worry of, "Did I install a scam script", "Do I have malware?"

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