Does AirGap Make Bitcoin Hardware Wallets More Secure?

Is Your Bitcoin Stored Securely?

Whether you’re new to the cryptocurrency scene or have been holding Bitcoin since the early days, it’s important you feel confident that you’re keeping it safe. While Bitcoin hardware wallets have always been considered the most secure storage method, there’s a new technology that might have overtaken it.

AirGap is an exciting development that offers many benefits, such as its ability to be used with smartphones or PCs. However, the biggest debate lies around security.

In this article, we’ll discuss how Bitcoin hardware wallets stack up against an air-gapped wallet and which is best for you.

What Is A Bitcoin Hardware Wallet?

Usually, a hardware wallet for cryptocurrency is a small plug-in device, such as a USB, that acts as an offline storage device for Bitcoin and other crypto and digital assets.

Contrary to what many people believe, hardware wallets don’t actually store your cryptocurrency or digital assets offline – they’re always live on the blockchain. However, they store your private keys offline, meaning no one can get access to your Bitcoin wallets.  

As long as your private keys are offline and you don’t share them with anyone else, you will be the only person who has access to your Bitcoin.

You might sometimes hear crypto hardware wallets called cold storage – the terms are used interchangeably.

What Is An AirGap Wallet?

An AirGap wallet is a type of cryptocurrency hardware wallet with a few different features. Instead of being a plug-in device, an AirGap wallet never physically connects to another device or network.  

Instead, it uses companion software to initiate a transaction before using a QR code or MicroSD card file to finalize the transaction with the AirGap wallet.

How Does AirGap Make Bitcoin Hardware Wallets More Secure?

As mentioned, an AirGap wallet is never connected to the internet. Your Bitcoin is most at risk of being hacked and stolen when your wallet is online. Therefore, because an AirGap is never connected to the internet, its level of security is elevated.

Yes, a Bitcoin hardware wallet or any other cold storage device is rarely online. However, whenever you need to complete a transaction, you put your Bitcoin at risk. One of the main advantages of air-gapped wallets is that you don’t face this difficulty.

How Does An AirGap Wallet Work?

So, we’ve told you that an AirGap wallet never connects to another device, but how does that actually work in practice?

Well, firstly, the crypto hardware wallet owner will open their companion software – this can be installed on a phone, laptop, or PC.

Here, they’ll initiate transactions and partially validate them.

Then, the companion software generates a QR code or file. If the user prefers to use a file, it will be transferred to a MicroSD card.

To verify the transaction, the AirGap wallet will scan the QR code or open the file and complete the validation process.  

Then, the user returns the companion software to push the transaction live to the blockchain network.

Therefore, at no point are the private keys live or in contact with the blockchain network.  

When Should You Use An AirGap Bitcoin Hardware Wallet?

Anyone who owns Bitcoin should consider using a hardware or cold wallet.

You’re most at risk of losing your cryptocurrency if you keep it on an exchange or in a hot wallet.

If you’re still using an exchange to store your crypto, you need to remove it as soon as possible. Technically, you don’t own this cryptocurrency as you don’t hold the private keys for your wallet – the exchange does.

If you’re looking for the most robust security while still having user-friendliness, then an AirGap wallet is the best choice.

Additionally, if your portfolio is of a value that you can’t afford to lose, you should be taking steps to keep it as safe as possible.

AirGap Wallet Concerns

At the minute, no Bitcoin hardware wallets can claim to be 100% secure – even AirGap wallets.

There are a few vulnerabilities that could be targeted. At some point, your air-gapped wallet has to interact with another device. For example, if you use a MicroSD card, that card has been inserted into an internet-connected laptop or PC.

This presents hackers with the opportunity to target the SD Card ports, where they can install malicious files on the device, giving them access to your AirGapped wallet.

However, it’s important to remember this is a difficult task and unlikely to occur.

In Summary

Overall, AirGap does make Bitcoin hardware wallets more secure. It provides an additional layer of protection in comparison to traditional cold storage as it is never directly connected to another device or network.

However, all Bitcoin hardware wallets give you enough protection to feel confident that your cryptocurrency will remain secure. If you’re not currently using some form of cold storage, then you should be.

To get a head start on securing your crypto, check out Escrypto’s range of wallets and payment solutions that provide institutional-grade security to retail traders.