Hardware Wallets Explained: Do You Need One?

Updated 2026-10-30

Short answer: a hardware wallet is a small device that keeps your private keys offline and shows every transaction on its own screen before you approve it. Malware on your computer can't take the keys or quietly change what you sign. It's worth having once you hold more crypto than you'd be comfortable losing. Buy it from the maker, set it up yourself, and keep the seed phrase on paper.

What it protects against

• Malware and hacked computers. The keys never leave the device, so a compromised computer can't copy them.
• Tampered transactions. You confirm the amount and address on the device's own screen, which the computer can't fake.
• Phishing that asks for your keys. There's nothing on the computer to steal.

What it doesn't protect against: you approving something bad. If you confirm a harmful approval or send to a scammer's address on the device, it goes through. See how to read a transaction before you sign.

Do you need one?

• Small amounts, or learning: a phone or browser wallet is fine.
• Savings you'd hate to lose: yes. The device usually costs less than the amount most people keep in crypto.
• Coins on an exchange: a hardware wallet only helps once you move them to your own wallet. See exchange or your own wallet.

Setting one up properly

1. Buy from the maker's own store or an authorised reseller, never second-hand or from a marketplace.
2. Check the packaging for tampering, and follow the maker's setup guide from its official site.
3. Let the device create a new seed phrase. A device that arrives with a seed phrase already written on a card is a scam: never use it.
4. Write the seed phrase on paper (or metal), in order, and store it offline somewhere safe. Never type it into a computer or phone, or photograph it. See seed phrases and hardware wallets.
5. Set a PIN.
6. Install the maker's official app and update the firmware through it.
7. Send a small test to the new address, and check the address on the device's screen matches.

Using it with apps

Most hardware wallets connect to MetaMask, Rabby and other wallets, so you can use them with apps (including ours) while the keys stay on the device. Each transaction appears on the device for you to check and confirm.

Mistakes that defeat it

• Typing the seed phrase into a website or "verification" form. Real makers never ask for it.
• Approving on the device without reading the screen.
• Keeping the only copy of the seed phrase next to the device, or in a photo or cloud file.
• Buying from an unofficial seller.

Do this

1. Get a hardware wallet from the maker once your savings justify it.
2. Set it up yourself, with a new seed phrase written on paper and kept offline.
3. Read every transaction on the device's screen before you approve it.