Hello Hive Fam!

So you may have heard the phrase, Not your keys - not your crypto. But what exactly does that mean? Well, it was coined from the sentiment that if you are using a custodial platform or exchange, then they are really the ones holding onto your funds for you and so if something happens such as they suddenly go out of business, or some kind of government mandate causes them to freeze transactions - then you can’t access your funds and there’s really nothing you can do about it.

So how can you avoid that and keep 100% of the control over what happens with your crypto? Well that’s where non-custodial options like hardware wallets come in. With a hardware wallet, you not only have full control over your funds - but you have an extra layer of security by having a physical device that is needed to access your accounts. Because let’s face it most hackers like to sit behind their computer and don’t necessarily want to come break into your house.

Now one of the biggest misconceptions about hardware wallets is that your funds actually live in the device. So if they aren’t on the device… then where does your crypto live then? Well think of it kind of like the cloud - they are coded into the blockchain and this is just like your key to get in and use it.

So how do these things actually work? Well each different brand of hardware wallets operates in a slightly different way - but generally you’ll have a pin code that you put in to get access to your accounts and make any kind of transactions you wish.

What happens if you DO lose this? Well, when you set your hardware wallet up - you’ll receive a Seed phrase that is usually a string of 24 randomly generated words that are unique to you and your accounts. And so if you lose the physical device... you would simply order another one and then use the seed phrase to restore it on that new device. This is why keeping your seed phrase safe and having secure backups of it is the MOST IMPORTANT THING you can do when it comes to securing your funds.

Speaking of security… how secure is this… really? I mean it kind of just looks like a glorified USB stick. There are different layers of security and although it’s not as secure as fully air gapped cold storage devices… it is much more secure than only using online layers of security to protect your accounts.

So should everyone use a hardware wallet? Well it depends on how you are planning to use your crypto. A hardware wallet is generally best for crypto that you plan to hold long term and not use for daily transactions, or trading. So you may end up using a mix of different wallet and platform solutions based on your goals and desired level of security.

I hope you found this video helpful and i’ll be back soon with more 2 minute cryptocurrency and blockchain explainer videos.

XO, Lea