How do hardware wallets enhance the security of crypto holdings?

[dkbit98]

Hardware wallets are dedicated devices used for storing secret phrase offline while making it possible to sign a transactions in the same time.

Main advantage and security improvement compared to software wallets is that you need additional step with confirmation of every transaction.
In most hardware wallets seed phrase is kept in Secure Elements, that are special dedicate chips used together with main processor in this devices.
Older devices didn't have secure element so it is recommended to use additional passphrase for them.

Hardware wallets can't be infected with viruses and malware and they are not connected to the internet directly, and all that is packaged in small form factor.
Some DIY signing devices don't even hold seed phrases permanently, so you need to load in with QR code every time you turn on device, this is better for long term storage.

Best hardware wallets are Open Source, and if they are airgapped than they are not connected with any other devices, except with QR codes or microSD cards.
This is the best combination if you are looking to enhance the security of your coins.

I made a list of most open source devices used today.
There are pros and cons for all of them, and you can buy them cheap, expensive or make them yourself as DIY project.

Hardware wallets with Open Source firmware:

• Trezor One; model T; Safe 3 ^{c r}
• Bitbox* ^r
• Passport** ^{c r}
• Jade
• Satochip
• Keepkey* ^r
• BitHD*
• Prokey*
• OneKey Classic*; Mini, Touch
• HyperMate
• Cypherock X1
• Hito (pre-sale)
• Bitlox
• Keystone3
• BitKey
• Portal

DIY Open Source Hardware wallets (signing devices) (only for advanced users):

• Jade DIY Wallet
• Bowser DIY Wallet
• Trezor DIY Wallet
• PiTrezor DIY Wallet
• Specter DIY Wallet
• SeedSigner DIY Wallet ^sd
• Krux DIY Wallet ^sd

^sd Signing Device without permanent storage.

[Ambatman]

Many hardware wallets include secure components, which are dedicated microcontrollers meant to securely store and manage sensitive data such as private keys. These secure parts offer an additional degree of defense against a variety of assaults.

Sorry for my usage of words this feels too machine like. I couldn't really understand what you might I guess I would attribute it to my limited knowledge in the technical know how of Hardware wallets.

Hardware wallets can't be infected with viruses and malware and they are not connected to the internet directly

I don't really understand what the directly mean.  I thought cold wallet are the only hardware wallet that ain't connected to the internet. On the examples you gave is their quality directly linked to their price or there are other factors at play. Planning on getting one that's cheap but of good quality. Recommendation would be appreciated.

[Z-tight]

I don't really understand what the directly mean.

Hardware wallets store your keys permanently offline and is not connected to the internet, what is connected to the internet is the interface software wallet that is used to create and broadcast tx's, what the hardware device does is to simply sign the tx's offline.

I thought cold wallet are the only hardware wallet that ain't connected to the internet.

Cold wallets are wallets that are not connected to the internet, i.e. hardware wallets and airgapped wallets.

[dkbit98]

I don't really understand what the directly mean.  I thought cold wallet are the only hardware wallet that ain't connected to the internet. On the examples you gave is their quality directly linked to their price or there are other factors at play. Planning on getting one that's cheap but of good quality. Recommendation would be appreciated.

I don't get it what is so hard to understand?
You can't infect small dedicated device with viruses and malware when they are mostly created for windows operating system.
Cold Wallets can also be a paper wallets, or seed words written on paper or metal plates.

Cheap and good open source hardware wallet is Satochip, that is in form of credit card.
If you want something better but not to expensive than Trezor 3 Safe is nice.
There are other options I wrote above.
 

[Ambatman]

I don't really understand what the directly mean.  I thought cold wallet are the only hardware wallet that ain't connected to the internet. On the examples you gave is their quality directly linked to their price or there are other factors at play. Planning on getting one that's cheap but of good quality. Recommendation would be appreciated.

I don't get it what is so hard to understand?
You can't infect small dedicated device with viruses and malware when they are mostly created for windows operating system.

I don't think you understand what I was talking about. I asked what does it mean when you said its not connected to the internet directly. But there's no problem will just take it as it is.  Thanks for the recommendation will check it out.

[Findingnemo]

I don't really understand what the directly mean.  I thought cold wallet are the only hardware wallet that ain't connected to the internet. On the examples you gave is their quality directly linked to their price or there are other factors at play. Planning on getting one that's cheap but of good quality. Recommendation would be appreciated.

I don't get it what is so hard to understand?
You can't infect small dedicated device with viruses and malware when they are mostly created for windows operating system.

I don't think you understand what I was talking about. I asked what does it mean when you said its not connected to the internet directly. But there's no problem will just take it as it is.  Thanks for the recommendation will check it out.

Hardware wallets are designed in a way that storage where private keys are stored will never connect with the device we are connecting. So imagine the sign-in TX from cold wallet and the broadcast via a device connected to internet is same phenomenon happening inside a Hardware wallet too.