With the development of the popularity of cryptocurrencies, a number of proposals for cryptocurrency wallets have appeared on the market, with which we can safely store our digital assets. Currently, we have several providers on the market, and each of them is constantly trying to improve their devices.
We can use wallets that generate sets of keys for us, or we can opt for something more complicated, like having a device sign our transaction. This generates offline keys and is known as cold storage.
We can also choose AirGapped wallets, which are completely disconnected from the internet and all, wireless forms. They have no access to Internet connections, WiFi or even a USB drive. Their biggest advantage is that they completely eliminate hacking and virus attacks. Despite these advantages, AirGapped wallets are much less convenient than the others. Why? This question will be answered in our lesson today!
What is airgap?
Airgap is a security tool that automatically isolates a device from an untrusted network, such as the Internet, by removing all network interfaces. For example, airgap-enabled computers are used where we have security criticality.
In a very similar way, airGappedportfolios work. It is designed in such a way that there is no access to any form of wireless communication, i.e. internet, WiFi, NFC or even USB.
The term ‘air gap’ itself comes from the concept of having an ‘air gap’, between the wallet and wireless communications. It thus provides an additional layer of security against intrusions and exploits.
In theory, this type of wallet is supposed to be more secure, thanks to the physical connection between it and the computer.
How do AirGapped wallets work?
They are based on scannable QR codes or micro-SD cards. Transaction data can be stored on these small memory cards. The AirGappedwallet uses an application installed on your computer that supports PSBT (Partially Signed Bitcoin Transactions) for Bitcoin or another similar one for other cryptocurrencies. Let’s now walk through the process of transferring cryptocurrencies using this wallet:
- The user creates an unsigned transaction in the signing device application.
- The transaction is usually encoded in a QR code, which we scan with a hardware wallet.
- The transaction is recorded and stored as a file, which we read using a microSD card.
- The hardware wallet signs the transaction with its private keys and displays the signed transaction on the computer. It uses a QR code or microSD card for this.
- The computer application transmits the signed transaction to the network.
Types of AirGapped portfolios
This type of portfolio can come in various forms. However, we can most commonly encounter:
AirGapped hardware wallets. These are purpose-built wallets designed to store private keys offline. They facilitate transactions without exposing private keys. This type of device typically has digital screens to display transaction information and manual buttons to approve transactions.
AirGapped computers. You can also prepare an entire computer to serve you as this type of wallet. Such hardware is never connected to the Internet and is only used to store private keys and sign transactions.
On AirGapped computers, transactions are transmitted via a USB stick. Signed transactions are transmitted in exactly the same way. The approach is more complex and requires more technical skills.
AirGapped. Smartphones work similarly to computers with the same function. We restore the phones to factory settings and configure them without an Internet connection. We install the wallet software using an SD card.
Which wallet is best?
There is no clear answer to this question. However, you can always use several. You can store some of your funds in a classic wallet and some in AirGapped. Add to this additional security measures, such as multi-sig or key distribution. You have a ready-made solution and don’t need to deliberate which option is best for you.
Summary
Clearly, AirGapped wallets take security to new heights. This is very important especially for those who have their funds for a long time. AirGapped wallets provide high protection against threats by storing keys on a device that is never connected to the internet.
However, despite these features, you must know that this type of wallet is not reliable and is not for everyone. Those who perform many transactions a day will not be satisfied with this solution. The choice of wallet depends on its purpose and the user.
Complete today’s lesson!