Then what's the point of the hardware wallet?
I just don't get this.
"you need a hardware wallet to sign transactions with your private key. But it generates a private key without the internet, so, how does anyone transfer BTC to the wallet that the keys open?"
How does the wallet generated on a piece of air-gapped hardware get utilized by the blockchain to correctly direct transactions? That does not compute.
You extract the public key and put that into wallet software.
Naming conventions are a bit conflated, unfortunately.
A hardware wallet is for storing a private key.
Wallet software is for managing addresses from your public key.
The wallet software can construct a transaction, as that knows all your addresses and as it has access to the blockchain, knows your balances so you don't create transactions for amounts you don't have. However, as it doesn't have the private keys, it cannot sign.
The hardware wallet can sign your transaction, but doesn't know your wallet balances, so it cannot verify if you have the balances to spend, only that you have the private key that can sign.
As the hardware wallet doesn't have internet, it cannot broadcast a signed transaction, that has to go back to the wallet software, so it can broadcast the signed transaction to the broader network.
For sending, you need both. For receiving, you only need the wallet software, as you're not signing anything.
A hot wallet is basically these things combined.
You extract the public key and put that into wallet software.
Extract the public key from what, exactly?
100%. A big part of the hardware wallet industry is definitely based on sales due to fear of losing money. Especially Ledger.
I'm comfortable with using amounts of $1,000 on a hot wallet but that's because I'm a security conscious user.
I hadn't thought of the dynamic of marketing based on fear.
