A Bitcoin wallet is a digital wallet that is used to store, send, and receive bitcoin. It stores your public and private key. The private key is used to authorize transactions. If unauthorized individuals obtain your private key, they can steal your entire bitcoin balance. Therefore, it is essential to keep the private key confidential and secure at all times.
An air-gapped Bitcoin wallet is a highly secure type of bitcoin wallet that is completely disconnected from any form of digital communication, including the internet, Bluetooth, WiFi, NFC, and USB drives. The term “air-gapped” refers to the wallet’s physical isolation from any network or internet connection, making it nearly impossible for hackers or malware to gain access to the private keys required to spend the bitcoins stored within the wallet.
Benefits of Air-Gapped Wallets
While air-gapped wallets may not be as convenient as other types of wallets like mobile, hardware (non-air-gapped), and desktop wallets, they offer a variety of advantages.
Air-gapped bitcoin wallets offer a high level of protection against hacking and unauthorized access to private keys, as they are completely disconnected from the internet. They provide peace of mind to users, allowing them to securely store large amounts of bitcoin without fear of losing funds. These wallets are particularly popular among high-net-worth individuals and large corporations dealing with large sums of money. Additionally, air-gapped wallets can act as a backup solution for your other digital wallets, ensuring that bitcoin are safe even if your primary wallet is compromised or lost.
How Air-Gapped Wallets Work
Given that air-gapped wallets are completely offline, how do you connect with the blockchain network to conduct transactions?
An air-gapped wallet consists of the hardware wallet that holds the private key, is offline, and never connects to the internet. Then there’s a companion software application that allows for Partially Signed Bitcoin Transactions (PSBTs). You initiate a transaction by creating an unsigned transaction in the application that can be encoded as a QR code for scanning or stored as a file and read from a microSD card by the hardware wallet.
After signing the transaction with the private keys, the hardware wallet can display the signed transaction as a QR code on its screen or save it to a microSD card. The signed transaction is then imported by the computer’s companion application, which can then broadcast it to the network.
Air-Gapped Hardware Wallets
- Passport is a Bitcoin-only open source hardware wallet. The wallet is not connected to the outside world through USB data or wireless communications. It uses QR codes and a camera for communication instead. Its USB-C connector only powers the battery and does not transfer data.
- The Blockstream Jade is an open-source, bitcoin-only hardware wallet that can function completely air-gapped. Its camera scans QR codes for communication, eliminating the need for USB or Bluetooth connections.
- Coldcard is a well-known hardware wallet that you can use to store bitcoin. The wallet offers complete air-gap isolation, meaning it can function without ever needing to be connected to a computer. However, if you prefer to use it in a non-air-gapped manner, it still has the option to connect to a computer.
Reviews of Air-Gapped Wallets
While air-gapped wallets add an extra layer of security by keeping private keys offline and away from potential attackers, they are not completely secure. Even if the private keys are stored on a device that is not connected to the internet, physical theft or tampering with the device is still a possibility. Furthermore, QR codes used for communication between the air-gapped wallet and another device may contain malicious code, compromising the wallet’s security.