Summary

• An air-gapped wallet is a crypto wallet designed to be completely disconnected from the internet and any form of wireless communication.

• Air-gapped wallets typically sign transactions in an offline environment and interact with online devices via QR codes or micro-SD cards.

• Air-gapped wallets are generally considered more secure than other types of wallets.

• Air-gapped wallets are not completely foolproof and require a high degree of user responsibility. They are more suitable for people who hold large amounts of assets for the long term.

What is Qi Gap wallet?

An air-gapped wallet is a cryptocurrency wallet designed to be completely disconnected from the internet and any form of wireless communication. The types of wireless communications that air-gapped wallets isolate from connections include Bluetooth, wifi, NFC (Near Field Communication), and sometimes even USB drives.

The term "air gap" comes from leaving a physical "space" between the wallet device and any online network or wireless communication air gap", thereby providing an extra layer of security against hackers and exploits.

How does an air-gapped wallet work?

To remain disconnected from the internet and wireless communications while still facilitating transactions, air-gapped wallets must rely on scannable QR code or micro-SD card, which is a small removable memory card that can store transaction data.

Air-gapped wallets typically use computer-based software applications that support Bitcoin's Partially Signed Bitcoin Transactions (PSBT) or other similar partially signed transactions in different cryptocurrencies.

Let’s take a look at how an air-gapped wallet works when making Bitcoin transactions.

Step 1: Create a Partially Signed Bitcoin Transaction (PSBT)

Because this online device does not have the user's private key, it cannot fully sign the transaction. Partially signed Bitcoin transactions (PSBT) are designed to use all transaction details except a digital signature signed by the user's private key.

Step 2: Sign the transaction

By scanning the QR code, unsigned transactions will be transferred to the user's air-gapped wallet. Transactions can also be recorded and stored as files readable by micro-SD cards.

Air-gapped wallets have private keys and can sign transactions in an offline environment. It’s worth noting that air-gapped wallets are never connected to the internet or wireless communications, which theoretically keeps private keys safe.

Step 3: Broadcast transaction

Fully signed transactions will be transferred back to the online device again via QR code or micro-SD card.

The online device then broadcasts the signed transaction to the Bitcoin network. The transaction is then processed and confirmed by miners and recorded on the blockchain like any other transaction.

Types of air gap wallets

There are many types of air gap wallets There are different forms, but these are the most common air gap wallets.

Air Gapped Hardware Wallet

These are A hardware device designed specifically for storing private keys offline. These wallets can often facilitate transactions without exposing private keys to an online environment or wireless communications.

These devices typically have a digital screen (for displaying transaction information) and physical or touch buttons (for manually approving transactions).

Air Gap Computer

Users can also use their entire computer as an air-gapped wallet. This computer is usually never connected to the internet and is used exclusively to store private keys and sign transactions.

Unsigned transactions are usually transmitted to the air-gapped computer via a USB flash drive, and signed transactions are transmitted out in the same way. This method may be more complex and require a higher technical level on the part of the operator.

Air-gapped smartphone

Similar to air-gapped computers, smartphones can also be used as air-gapped wallets. The phone can be restored to factory settings while disconnected from the Internet. Wallet software is installed via SD card or similar method. This method is also complex and requires a higher technical level.

Differences between air-gapped wallets and other types of wallets

To better understand air-gapped wallets, it’s best to understand how they differ from other types of wallets.

We can classify wallets in many ways. Let’s take a look at the similarities and differences between air-gapped wallets and various types of wallets. .

Classify crypto wallets based on whether they are connected to the network

Hot wallet

Hot wallet refers to a wallet that is connected to the Internet in any way. These wallets are easy to set up and funds can be accessed quickly, making them convenient for traders and other high-frequency users.

Cold wallet

Cold wallets are completely disconnected from the Internet and use physical media to store keys offline, making them a safer choice for storing cryptocurrency. This method, also known as "cold storage," is ideal for long-term investors or "holders."

Air-gapped wallet is a special type of cold wallet, but not all cold wallets are necessarily air-gapped wallets.

Classification of cryptocurrency wallets based on physical form

Hardware wallet

A hardware wallet is a physical device that can store private keys offline. They are cold wallets, which are also more secure. They are often used for long-term storage of large amounts of cryptocurrency.

Software wallet

A software wallet is a program or app that is installed on your computer or smartphone. They are usually connected to the internet and are therefore hot wallets. This category includes web wallets, desktop wallets, and mobile wallets.

Paper wallet

The essence of paper wallet It prints the cryptocurrency address and its private key on a piece of paper in the form of a QR code. Thereafter, cryptocurrency transactions can be carried out by scanning these QR codes.

An air-gapped wallet is a type of hardware wallet, but not all hardware wallets are air-gapped wallets. Technically, paper wallets can be considered air-gapped wallets, but transactions using paper wallets typically require importing private keys into a software wallet, which breaks the "air gap."

Classify crypto wallets based on control of private keys

Hosted wallet

The private key of the custodial wallet is provided by a third party (such as a trading platform) Take control. They are generally easier to use, but much riskier than non-custodial wallets, as holders can only rely on third parties to keep their cryptocurrencies safe.

Non-custodial wallet

These wallet users have full control over their private keys. These wallets allow users to have complete control over their cryptocurrencies without involving any third parties. Most desktop wallets, mobile wallets, and hardware wallets fall into this category.

An air-gapped wallet is a non-custodial wallet, but not all non-custodial wallets are air-gapped wallets.

The difference between air gap wallet and hardware wallet

Air gap A wallet is a type of hardware wallet, but there are some major differences between the two.

Connect to the Internet

Air Gap Wallet Never connect to the internet. As mentioned above, air-gapped wallets conduct transactions by ensuring that private keys are always offline.

Hardware wallets can also store keys offline, but typically connect to an internet-connected device to sign transactions. Hardware wallets are specifically designed to ensure that private keys are always stored inside the hardware, but they do connect to an online device during the transaction signing process.

User experience

Air-gapped wallets may require more steps to conduct a transaction, while the transaction signing process for hardware wallets tends to be simpler and more straightforward since they are designed to connect directly to online devices.

However, if used correctly, hardware wallets usually still provide a high level of security because, by design, they are secure even when connected The device can also keep private keys isolated.

Both air-gapped wallets and hardware wallets provide a high degree of security by keeping private keys offline, but air-gapped wallets go a step further , strictly isolated from Internet-connected devices.

Are air-gapped wallets safer?

The crypto community generally believes that air-gapped wallets are more secure than other types of wallets.

The advantage of this security is that the air-gapped wallet is never connected to the Internet from creation to use. on your device, isolating it from cyber threats such as hacking, phishing, and malware.

Air-gapped wallets store private keys on a completely offline device, which allows bad actors to do so without physical access to the device. It's harder to steal private keys.

What are the risks and limitations of air-gapped wallets?

Air-gapped wallets are very secure, but that doesn’t mean they are foolproof, and they still have potential security vulnerabilities. If a user mistakenly connects an air-gapped device to the internet, or if someone introduces malware to the device via a USB stick (some air-gapped wallets use USB for charging and updating) or any other medium, the device is no longer secure. .

How to maintain good physical protection to prevent air-gapped wallets from being stolen, damaged or lost, users also face challenges. Users should follow various best practices to securely back up their keys to protect themselves from such risks. Finally, using an air-gapped wallet correctly and properly requires a high level of technical knowledge.

Choose the right air gap wallet

Cryptocurrency holders such as When deciding to invest in an air-gapped wallet, you should consider the following factors before choosing a device:

Compatible systems

Make sure the wallet supports the cryptocurrency you plan to store. Different wallets may have varying degrees of support for different cryptocurrencies - for example, some wallets are designed to only store Bitcoin. Before making a decision, be sure to check if the wallet supports the cryptocurrency you want.

Word of mouth and evaluation

Research the wallet’s reputation and see what other users in the crypto community are saying about it on platforms like Twitter, Discord, and Reddit. The level of trust and support from the cryptocurrency community is also a key factor to consider when choosing a wallet. Established wallets with a strong community presence are generally more reliable and less likely to have security vulnerabilities.

It is recommended that you choose a wallet developed by a brand with a good track record and good reputation in terms of security, reliability and customer support.

Development community

On GitHub and other platforms Evaluate the wallet’s development community and keep an eye out for what updates it’s making. Active development activity indicates that the wallet is regularly maintained and bug fixes and security enhancements are made.

User experience

Consider the wallet’s ease of use and user interface. The well-designed, intuitive and simple interface can make your fund management more convenient and easier to use.

Conclusion

Air-gapped wallets provide a high level of security to cryptocurrency users, especially those who hold large amounts of assets for the long term. They protect against online threats by storing private keys on devices that are never connected to the internet or any form of wireless communication.

Despite their high level of security, air-gapped wallets are not completely foolproof and require a high degree of user responsibility. Maintaining the integrity of the air gap and ensuring the physical safety of the equipment is key to maintaining its safety.

Not every user needs to use an air-gapped wallet. For users who trade frequently or hold only small amounts of cryptocurrency, other forms of wallets may be more convenient. The choice of wallet ultimately depends on the user’s needs, risk tolerance, and ability to manage wallet security.

Further reading:

What is a cryptocurrency wallet?

Hardware wallet introduction and reasons for use

What is the difference between custodial and non-custodial wallets?

How to store digital currency safely

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