Foundation Passport Batch 2

Hardware wallets can connect to your devices in a variety of ways to sign and manage transactions. The choice of connection method affects usability, security, and compatibility. Below we explain the most common connection methods: NFC , Air-Gapped , USB-C , and Bluetooth .

1.NFC (Near Field Communication)

What is it?
NFC is a wireless communications technology that allows devices to exchange data over short distances (usually less than 10 cm).

How does it work?
The hardware wallet communicates with an NFC-compatible smartphone or other device by holding it close.

Advantages:

• Quick and easy connection.
• No cables required, making it convenient for mobile use.

Disadvantages:

• Limited to devices with NFC support.
• Possibly less secure than air-gapped solutions, as it uses wireless communication.

Suitable for : Users who seek convenience and manage transactions primarily on a smartphone.

2. Air-Gapped (Completely Offline)

What is it?
An air-gapped wallet does not connect directly to another device via cables or wireless technology. Communication occurs via QR codes or physical storage media, such as SD cards.

How does it work?
Transactions are prepared offline on a device (e.g. smartphone), after which they are transferred to the wallet via QR codes or files.

Advantages:

• Extremely secure, as there is no direct contact with networks or other devices.
• Protected against online attacks such as hacking or malware.

Disadvantages:

• May be less user-friendly due to the additional steps required to complete transactions.
• Less suitable for users looking for speed and convenience.

Suitable for: Users who value maximum security above all else. Also very suitable for long-term investors.

3. USB-C

What is it?
USB-C is a physical connection via a cable between the hardware wallet and a computer or smartphone. It is a widely used standard known for its fast data transfer and broad compatibility.

How does it work?
The hardware wallet connects to a compatible device via a USB-C cable.

Advantages:

• Very stable connection, ideal for long-term use.
• No wireless communication, which makes it more secure against certain attacks.
• Suitable for use with both PCs and modern smartphones.

Disadvantages:

• Limited by the physical cable; less portable and flexible.
• Requires that the connected device is secure and malware-free.

Suitable for: Users looking for a reliable and secure connection without wireless technology.

4. Bluetooth

What is it?
Bluetooth is a wireless technology that allows devices to exchange data over short distances.

How does it work?
The hardware wallet connects to a smartphone or computer via a Bluetooth connection.

Advantages:

• No cables required, ideal for mobile use.
• Suitable for users who value convenience and flexibility.

Disadvantages:

• Wireless communications can be susceptible to hacking if poorly implemented.
• Depending on battery life of both devices.

Suitable for: Users who want convenience and manage transactions on the go.

Modern hardware wallets offer more than just storing and securing your cryptocurrency. Many wallets come equipped with additional features that make managing and expanding your digital assets easier. Below we explain the most important functions: swap , buy , stake , and sell , and how they enrich the use of your hardware wallet.

Swap (Exchange)

What is it?
The ability to instantly exchange between different cryptocurrencies without using a third-party exchange.

How does it work?
For example, via integrated services in the hardware wallet you can exchange Bitcoin for Ethereum or other supported coins.

Advantages:

• No need to transfer crypto to an exchange, keeping your assets safer.
• Time-saving and user-friendly.

Suitable for: Users who want to actively trade or diversify their portfolio without the risks of external platforms.

Buy (Buy)

What is it?
The ability to purchase cryptocurrency directly through the hardware wallet.

How does it work?
The wallet is connected to services that allow you to buy crypto via bank transfers, credit cards, or other payment methods.

Advantages:

• Buy crypto easily and securely, directly to your wallet.
• No third party needed for initial purchase.

Suitable for: Beginners and users who want to buy crypto directly without external exchanges.

Stake (Bet)

What is it?
A process where you stake your crypto to support the network and earn rewards.

How does it work?
The wallet directly supports staking services that allow you to lock assets such as Ethereum or Cardano into the network.

Advantages:

• Generate passive income by participating in the network.
• No additional software or services needed; everything happens through the wallet.

Suitable for: Users who want to grow their assets without actively trading.

Sell ​​(Sell)

What is it?
The ability to sell crypto directly from the wallet and convert it to fiat currency (such as euros or dollars).

How does it work?
Through connected services, you can sell your crypto and have the proceeds sent directly to your bank account.

Advantages:

• Fast and secure way to liquidate crypto.
• No external exchange required, which is easier and more secure.

Suitable for: Users who want to quickly convert their crypto to traditional currencies.

What is open source in hardware wallets?

An open source hardware wallet is a wallet whose source code (software) and sometimes also the hardware designs are freely available to everyone. This means that the instructions and operation of the device are completely transparent. The community of developers, security experts and users can view, check and in some cases even modify and improve the code.

When choosing a hardware wallet, the question of whether the device is open source often plays an important role. For some, open source offers ultimate transparency and control, while others value ease of use or trust in the manufacturer. This explanation explains why some people consciously choose an open source wallet and why others find this less important.

Open source wallets typically make two key components public:

1. Software : The code that determines how the wallet works, such as signing transactions and communicating with blockchains.
2. Hardware (not always) : The physical design and specifications of the hardware itself.

Why do people care about open source?

1. Full transparency

• Verifiability: With an open-source wallet, anyone can verify the operation of the device. This means that independent experts can confirm that there are no hidden backdoors, vulnerabilities, or malicious features.
• No secrets: Users do not have to blindly trust the manufacturer; the operation is completely public and verifiable.

2. Better safety

• Community-driven audits: The open source community regularly conducts security audits, which minimizes the chance of errors or vulnerabilities.
• Faster resolution: Any issues or bugs are found and resolved faster thanks to a broad network of developers and security experts.

3. No vendor lock-in

• Independence from the manufacturer: If the manufacturer stops or ceases development of the wallet, the open source code remains available. This means that the community can continue to support and update the wallet.
• Future-proofing: Users are not dependent on the continued existence of a specific company.

Why Some Users Don't Care About Open Source

While open source is attractive to many people, others see it differently:

• Lack of technical knowledge: Not everyone has the skills to check the code themselves. They prefer to rely on a reputable manufacturer that makes well-secured products, regardless of whether it is open source.
• Ease of use: Some open-source wallets have a steeper learning curve and may be less user-friendly than their closed alternatives.
• No visible impact: For users who value security and functionality, a well-secured closed source solution can feel just as reliable.