This year, the value of crypto holdings o has plummeted, and many investors are now concerned about the security of their cryptocurrency funds following a string of thefts in which almost $2 billion has been stolen by hackers.
According to market research company Straits Research, the worldwide hardware wallet industry, estimated to be worth $245 million in 2021, will increase to more than $1.7 billion by 2030.
Although they may seem like a relic from a simpler digital era, hardware wallets which look like retro physical devices like USB sticks that store cryptocurrency assets offline—are proving to be a popular alternative. It is being fueled by a constant barrage of cyber thefts, which have resulted in crooks stealing $1.9 billion in cryptocurrency in the first seven months of the year, a rise of 60% from a year earlier, according to researcher Chainalysis. Much of this was stolen from “hot” internet wallets or blockchains.
Hardware wallets typically don’t appeal to first-time investors, who frequently purchase cryptocurrencies on major exchanges and may choose to preserve their holdings on those platforms, where they can easily log in with a username and password. These hot wallets are convenient and enable quick trading.
A French manufacturer of hardware wallets, Ledger, claimed that sales increased as a result of the recent crypto robberies. Ledger Enterprise’s global head, Alex Zinder, claims that user interest significantly increased under some of these challenging market conditions.
In contrast to soft wallets, hard wallets also provide the owner with private keys. Private keys for soft wallets are kept by the company providing custodial services. Similar to a password, a private key is a secret number that is used to unlock wallets if the owner has forgotten or lost their wallet password. Private keys are also used to validate ownership of blockchain addresses and sign transactions.
However, once a user loses this hardware wallet or their private, they will not be able to retrieve their crypto holdings.