The term you’re looking for is a hardware wallet (also called a cold wallet or cold storage device).

Quick Scoop: What “this” actually is

When people say “lowers the risk of hacking by generating and storing private keys on a separate device,” they’re talking about a crypto hardware wallet.

  • It’s a small physical device (USB stick or card-like gadget).
  • It generates your private keys inside the device itself.
  • It stores those keys offline, away from your internet-connected phone or computer.
  • It signs transactions inside the device, so the keys never have to leave it.

Because your keys never touch an online system directly, the chances of malware or remote hackers stealing them is much lower.

How it reduces hacking risk

Here’s the core idea in plain terms:

  1. Offline key storage (“cold” storage)
    • Keys are saved in a secure chip inside the device, not on your PC or phone.
 * Even if your computer is full of malware, the attacker cannot just copy your private key from the hardware wallet.
  1. Secure element / secure enclave chips
    • Many hardware wallets use a special tamper‑resistant chip called a secure element or secure enclave to store keys.
 * This chip is designed to resist both remote attacks and physical probing.
  1. On‑device transaction signing
    • When you send crypto, your computer or phone sends the transaction data to the wallet.
 * The hardware wallet signs it internally and returns only the **signature** , not the key. Your private key never leaves the secure chip.
  1. User verification on the device screen
    • Many devices show the address and amount on their own screen so you can confirm it physically before approving.
 * That way, even if your computer is compromised, you can see if a transaction was altered.

Mini examples and context

  • Popular examples of this “separate device” include Ledger Nano series, Trezor devices, SafePal S1, and others.
  • A typical flow:
    1. You plug in or connect the hardware wallet.
    2. Your wallet app prepares a transaction.
    3. The hardware wallet shows you the details on its own screen.
    4. You confirm on the device; it signs the transaction internally and sends back only the signed data.

All of that is why, in security explanations, the phrase you quoted maps directly to “use a hardware wallet (cold wallet)” as the security measure.

TL;DR:
The thing that “lowers the risk of hacking by generating and storing private keys on a separate device” is a cryptocurrency hardware wallet (cold wallet) that keeps your private keys offline in a secure chip and signs transactions internally so the keys never leave the device.

Information gathered from public forums or data available on the internet and portrayed here.