A hardware wallet is a special type of bitcoin wallet which stores the user's private keys in a secure hardware device.

They have major advantages over standard software wallets:

- private keys are often stored in a protected area of a microcontroller, and cannot be transferred out of the device in plaintext
- immune to computer viruses that steal from software wallets
- can be used securely and interactively, private keys never need to touch potentially-vulnerable software
- much of the time, the software is open source, allowing a user to validate the entire operation of the device

Edit: Please see https://bt.irlbtc.com/view/78614.msg1327630#msg1327630 for an updated prototype.

Hardware Bitcoin wallet is a project which aims to implement a minimal dedicated Bitcoin wallet. Its main difference with every other Bitcoin client/wallet out there is its low resource requirements: the binary is currently 25 kilobytes large, it uses less than 2 kilobytes of RAM and requires only 160 bytes of non-volatile storage per wallet. With such low requirements, I reckon a production device would be smaller, more robust and cheaper than any other Bitcoin wallet.

The wallet stores private keys (actually, it only stores a seed for the deterministic key generator), parses transactions and signs transactions. It essentially doesn't do anything else. This is by design - simpler means a smaller attack surface. Private keys are generated on the device and never leave the device, except when doing a wallet backup. Even then, the seed is only displayed - it is never sent over the serial port. My intention is that physical access to a device is required in order to obtain private keys or to spend anything. As an additional layer of security, wallets can be encrypted. An encrypted wallet offers pseudo-two-factor authentication: in order to spend BTC, you need to know the wallet passphrase and you need to have the hardware Bitcoin wallet.

Here's a somewhat messy prototype:

The thing on the left is an Arduino clone (though I'm not actually using the Arduino IDE or libraries). The bunch of discretes on the lower part of the breadboard comprise a noise source, which is used to generate random numbers. The input user interface consists of two pushbuttons (bottom-left and bottom-right corners), where the user can approve or disapprove of actions. This gives you an idea of the necessary hardware peripherals required. Of course, a production device would be much more compact than this .


Here's the prototype signing a transaction:

Here's an actual transaction that it signed: http://blockexplorer.com/t/AEhoN6bzjd.

The code is hosted at: https://github.com/someone42/hardware-bitcoin-wallet. Currently, there's only a port for the ATmega328 microcontroller. However, most of the code is platform-independent; porting to another microcontroller "only" involves writing drivers for the microcontroller's peripherals.

I shall commit to being open and transparent, releasing source code and hardware specifications as I produce them. If people are interested, I might even design a production hardware Bitcoin wallet. From simple BOM and assembly cost estimates, such a device would cost 6 to 7 USD per unit to manufacture (for a quantity of 1000). If anyone has questions/suggestions, feel free to ask in this thread.

Hardware wallet is a physical electronic device, built for the sole purpose of securing bitcoins. The core innovation is that the hardware wallet must be connected to your computer, phone, or tablet before bitcoins may be spent. Hardware wallets are a good choice if you’re serious about security and convenient, reliable Bitcoin storage.

Bitcoin hardware wallets keep private keys separate from vulnerable, internet-connected devices. Your all-important private keys are maintained in a secure offline environment on the hardware wallet, fully protected even should the device be plugged into a malware-infected computer. As bitcoins are digital, cybercriminals could, potentially, target your computer’s “software wallet” and steal them by accessing your private key.

Creators of Bowser are calling it diy hardware wallet, so it is diy hardware wallet,

What about Ledger HW1 is that Hardware Wallet or piece of shit USB and why they called it Hardware wallet?

One more definition for hardware wallet from 2019:

But this, by definition, is not a hardware wallet.

I think we're stuck with semantics here. How do you define what the 'hardware wallet' is? Does every hardware wallet have a secure element? I don't think so.
In my humble opinion, this DIY project can be described as a hardware which can be used as a wallet. Is it a safer than the real hardware wallet? Of course it's not.

...
Either way, this project simply is an air-gapped wallet on a small device. No hardware security. Take it or leave it.

And one of your "definitions" would mean a paper wallet also is a hardware wallet.

I am not aware of any case/vulnerability where the device leaks customer information. What kind of information are you referring to?
The website definitely is horrible, just as most of the websites on the internet. Browsing without ad blocker and a javascript blocker is almost a no-go nowadays.