A hardware wallet is a dedicated physical device designed to securely generate and store your private cryptographic keys offline. It signs transaction data internally when connected to a computer or phone, but the keys themselves never leave the device. This creates an "air-gapped" barrier that protects them from online hackers, malware, and phishing attacks.

While software wallets are convenient, they reside on internet-connected devices (phones, computers) that are vulnerable to countless threats. A hardware wallet provides superior security by keeping your keys in a separate, isolated environment. It ensures that even if your computer is compromised, your private keys remain safe and inaccessible on the physical device.

No, your digital assets are not stored on the physical device itself; they exist on their respective blockchains. The hardware wallet only secures the private keys needed to access them. As long as you have securely stored your recovery seed phrase (provided with the wallet), you can recover your entire portfolio on a new device, even if the original is lost or damaged.