On the subject of hardware wallets

I’ve only ever purchased one hardware wallet. It was a Coldcard Version 1. But I’ve encouraged many others to purchase ledgers. When you have $100 worth of crypto you take $100 worth of precautions. But I don’t think that $100,000 worth of crypto is appropriately stored on a device like a hardware wallet. But I don’t regret my purchase whatsoever, and I’ll tell you why.

Like Lopp’s views on using air gap laptops running obscure distributions of operating systems, these tools are not fit for task for the average new entrants to cryptocurrency. They would be best served using custodial exchanges and non-custodial hot wallets on their phone.

There’s a group of Bitcoiners out there who know just enough to be dangerous & they are recommending managing private keys with airgapped PCs instead of hardware wallets. This is a step backwards in usability, which is a key component of /practical/ security.

— Jameson Lopp (@lopp) December 3, 2020

My Coldcard is no longer supported by the manufacturer, never mind the user having familiarity with it. I took delivery and the user interface was not simple or straightforward and there are a number of options that might inadvertently render the Coldcard in an unusable state or bricking it. So, rather than using this piece of hardware to keep a digital secret in the form of the private key, I have trusted various exchanges and hot wallets with these sums. 

The notion of a secure enclave or encrypted chip is interesting to me but I have no way to verify the veracity of the claims made and that there is not any other interference in the system architecture. While this is to the chagrin of the manufacturers of hardware wallets like Ledger, Trezor, and Coldcard, this does not diminish the work that they are doing to provide options for the most ardent Sovereign money supporters. Many of them are vanguards for the industry and help protect users against scams and fraud. It is more of an indictment of Smartphone makers who haven’t delivered a truly secure softwarization of the hardware wallet.

On the balance of probability, I weigh that the possibility of loss from physical damage, technological incompatibility, electromagnetic interference, loss or theft of the device, is greater than the risk of keeping it in a centralized company that practices better decentralized key management. They also have a much stronger profit motive to do this job right over a period of time measured in decades and not 18 month product cycles. Maybe I just don’t have enough Bitcoin yet, but I’m happy to contribute to projects to find out what works for me and what doesn’t.