Hardware Wallet Security

What OS does your hardware wallet run? It’s not a question most people think about.

Hardware wallets are a gateway to decentralized finance, which potentially secures assets worth millions of dollars. Yet their security hinges on principles similar to those governing IoT devices.

From cryptographic signing to private key management, every transaction relies on a few kilobytes of code running on hardware or software wallets. And while the blockchain itself is trustless, your wallet introduces an overlooked layer of trust in the underlying technology.

The microcontroller behind your wallet

Every time you sign a transaction, your wallet’s firmware springs into action. Hardware wallets rely on lightweight real-time operating systems (RTOS) optimized for cryptographic precision in constrained environments.

Why an RTOS?

Timing is everything in cryptography. An RTOS ensures that operations are deterministic, meaning they happen exactly when and how they’re supposed to. This prevents attackers from exploiting timing variations to extract sensitive information like private keys.

• Ledger uses a custom operating system, BOLOS, layered atop a secure chip for isolation.
• Trezor opts for an open-source RTOS running on STM32 microcontrollers.
• Coldcard uses bare-metal firmware, stripping away unnecessary complexity for added security.

But here’s the catch: any flaw in the firmware, OS, or cryptographic libraries could compromise the entire wallet.

Hidden Risks

1. Supply Chain Compromise

Your hardware wallet is only as secure as the path it took to reach you. Tampered devices in transit or during manufacturing could carry malware at the firmware level.

Always buy directly from the manufacturer or authorized resellers. Verify the device’s authenticity through official tools or guides.

2. Firmware Vulnerabilities

Firmware updates can fix bugs, but they can also introduce new vulnerabilities or worse, malicious payloads.

Check for official cryptographic signatures on firmware updates. Avoid using wallets that don’t allow you to verify firmware integrity.

3. Device Security

For software wallets, the security of your computer is critical. A compromised device through malware can render even the best wallet useless.

4. Side-Channel Attacks

Attackers can exploit the physical characteristics of your hardware wallet like power consumption or electromagnetic emissions to extract private keys.

Hardware wallets are hailed as secure, but their security is only as strong as the code and hardware behind them. The blockchain itself may be trustless, but your wallet adds a layer of trust in its manufacturer, its firmware, and its operating system.