Hardware wallet process?

Bitcoin Questions and AnswersCategory: QuestionsHardware wallet process?

Glen Bernas asked 7 months ago

Can can explain how hardware wallets work. From my understanding currency is copied to the hardware device; so your not able to hack or steal it. but until the the hardware device is turned on and is up current; where does the transactions reside? it it possible to steal the currency until we sync the device? For example if we are mining and we attach the address to the wallet which is a dongle. where are those transaction held until we sync it?

1 Answers
Steven Hay answered 7 months ago

Hi Glen,
 
All bitcoins are stored within addresses on the Bitcoin blockchain. No coins are actually stored in a hardware wallet. Coins are not like files which can be moved from one device to another.
 
What hardware wallets store are the private keys which enable coins to be spent from one address to another. So if the blockchain is like a row of safe deposit boxes with invisible walls, which lets everyone see how much wealth is stored in each numbered box, then the private key is what allows its owner to unlock a box and move the value it contains into a different box.
 
Hope this makes sense. There’s no way to move the coins without access to the private key, and this privkey is what a hardware wallet generates and securely stores.

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