A hardware wallet helps protect your cryptocurrency in two ways: it keeps the private keys used to spend it separate from your computer or phone, and its own screen lets you check transaction details before approving them. Both matter. Protecting the keys cannot prevent a loss if you approve the wrong payment or disclose your wallet backup.
A secure design also needs safeguards for how the wallet is created, how its secrets are stored, and which software the device can run. This article explains those principles and how BitBox and BitBox Nova put them into practice.
Why use a hardware wallet instead of an exchange or software wallet?
Your cryptocurrency is recorded on the blockchain. The wallet holds private keys: secret data that lets you authorize spending. Someone who obtains those keys can spend the associated funds without your hardware wallet.
The main differences between these options are who controls those keys and where they are held:
| Option | Who controls the keys? | Main risk or responsibility |
|---|---|---|
| Exchange | The exchange. | You rely on it to process withdrawals. A hack, business failure, or withdrawal restriction can prevent access to your funds. |
| Software wallet holding keys on your computer or phone | You, with keys stored on that computer or phone. | Malware on that device may steal the keys. You are responsible for protecting the wallet and its backup. |
| Hardware wallet | You, with keys held on a separate device. | The device separates keys from the computer or phone and provides its own screen for verification. You still need to check payment details and protect your backup. |
Using an application with a hardware wallet differs from using a software wallet that holds the keys itself: the application works with the hardware wallet without receiving its private keys during normal operation. The hardware wallet reduces risk, but does not remove every risk.
How a hardware wallet protects your private keys
When you send a transaction, the application and hardware wallet divide the work:
- The application prepares the transaction and passes its details to the hardware wallet.
- You verify and approve on the device. Check that the destination address and amount match the payment you intend to make. If they do not match, do not approve.
- The hardware wallet signs internally. After approval, it uses the private keys to create a digital signature without giving those keys to the application.
- The application broadcasts the signed transaction to the network without receiving the private keys.
Why you verify transactions on the device
The hardware wallet's screen gives you a place to check what you are authorizing independently of the computer or phone. For example, malware could replace a copied recipient address with an attacker's address. If you approve that address on the device, the hardware wallet can sign the transaction correctly even though the payment goes to the wrong person.
- Before sending: Compare the full destination address and amount shown on the BitBox screen with the payment you intend to make, using recipient details from a trusted source. If they do not match, do not approve.
- When receiving: Verify your receiving address on the BitBox screen before giving it to the sender.
Stop if the BitBoxApp reports a security failure
The device screen is the reference for transaction checks, but it does not override security warnings from the BitBoxApp. Stop if the app reports that your device is not authentic or reports an anti-klepto protocol failure—a failure of a check intended to prevent certain signatures from leaking private-key information. Do not continue simply because the device screen appears normal.
How BitBox protects the wallet and its firmware
Transaction verification is one part of the design. BitBox also combines protections for wallet creation, secret storage, and the software running on the device.
Creating a wallet that is difficult to guess
A newly generated wallet starts with secret random data called a seed, from which its private keys are derived. Predictable starting data could let an attacker recreate the keys. BitBox combines randomness from several sources, including both chips and the connected computer, to reduce reliance on any single source.
For a closer look at the randomness sources and how they work together, read what entropy is and how BitBox generates your wallet.
Protecting the seed with two chips and your password
BitBox and BitBox Nova divide the work between two chips. A microcontroller runs the open-source wallet firmware: it derives private keys and signs transactions. The wallet seed is stored encrypted on that chip.
A separate secure chip helps protect access to the seed. Unlocking it requires your device password and secrets held by both chips, so reading the microcontroller's storage alone is insufficient. The secure chip also slows and limits password guessing without receiving the wallet seed or private keys.
This separation combines additional physical protection with the ability to inspect the code handling wallet secrets. It does not make the hardware or firmware immune to vulnerabilities.
BitBox Nova uses an EAL6+ certified secure chip, with documentation accessible without a non-disclosure agreement. The certification applies to the chip, not to the complete wallet. Nova also enforces the limit of ten failed device-password attempts with a hardware counter in the secure chip. Reaching that limit resets the device, so recovery requires a checked wallet backup and, if used, the exact optional passphrase.
Our article on combining a secure chip with open-source firmware explains how this architecture protects the seed while keeping the wallet firmware open to inspection. For the Nova-specific changes, read the BitBox Nova introduction.
Checking firmware and device authenticity
Firmware is the software running on the hardware wallet. The BitBox bootloader checks that firmware is signed by BitBox before allowing it to run. Separately, the BitBoxApp checks the connected device's authenticity. These checks address different risks: unauthorized firmware and devices that cannot prove their authenticity.
Neither check guarantees protection against every vulnerability or physical modification. Before setting up a device, follow Check your BitBox before first use. For how these checks work alongside physical safeguards, read how BitBox reduces supply-chain risk from production to first use.
Why independent verification matters
BitBox publishes its firmware and BitBoxApp source code for inspection. Reproducible firmware builds let researchers compare a program built from the published source with the distributed release. These measures make independent scrutiny possible; they do not prove that every weakness has been found.
Security reviews and the BitBox bug bounty program help uncover vulnerabilities. For what transparency and reproducibility establish, read how BitBox reduces reliance on its manufacturer. The BitBox threat model describes the design's assumptions and limits.
What you still need to protect
Your backup can give access to your funds
A complete microSD backup or recovery words can restore your wallet without the original device or its password; if you use an optional passphrase, that exact passphrase is also required.
Keep backups private and offline, and never share recovery words or enter them into a website, computer, phone, support chat, or AI tool. BitBox Support will never ask for your wallet secrets.
See BitBox backup options and their protection requirements for how to choose and protect your backup.
Protect the device as well as its backup: keep your device password private, use the official BitBoxApp or trustworthy compatible wallet software, and keep the app and firmware up to date.
For attack scenarios and practical safety guidance, continue with Can a hardware wallet be hacked?