When I started looking at crypto there were lots of comments online of what a disaster Mt Gox was for Bitcoin owners. Mt Gox was an exchange that was hacked and many people lost Bitcoin.

So it is clear that if exchanges can be hacked you can lose your crypto.

The answer is to to keep some of your crypto on exchanges for trading purposes and to store the rest “somewhere safe”, in a hardware wallet. Given that all crypto movements are stored online, in a publicly readable format, it is hard to see what you can store in a “hardware wallet”. I find the name slightly misleading as I feel that my Bitcoins should be in the wallet, perhaps in a form that I can get out.

In fact, the hardware wallet is just a password protected memory stick that stores your private keys, each private key being just a string of numbers and letters. Now I can imagine that, a wallet that has keys in it, keys that serve to open up access to value stored on the blockchain.

So far, no one has managed to take a Bitcoin address (public key) and find the private key through running computer programs. This means that without the private key, no one (not even you) can recover the money from the blockchain.

Interestingly, when I first started with crypto, there we no hardware wallets and I just printed out the private key and hid it away where no one would find it.

So, after looking and looking, all I found in the hardware wallet was a series of numbers and letters.

I have simplified it but feel that this covers the essential points, or “Not your numbers, not your crypto”.