Hardware wallets are one of the most secure and safest solutions for storing your cryptocurrencies.
Hardware wallet is a form of cryptocurrency wallet where you can store your private keys on a safe physical computer. The cryptocurrencies saved in the wallet are kept offline, which means they can’t be compromised. However, the coins deposited are readily available as requested. If you’re not that versed in coding and technological info, the hardware wallet is a perfect way to store much of your cryptos.
Before we go any further, let’s take a closer look at the various forms of cryptocurrency wallets.
What is the Difference of Crypto Hardware Wallet
When we hear the term “wallet,” we always think of a pocket in which we can hold tangible currency. Cryptocurrencies don’t have a digital form, and the way we monitor the flow of these coins is through our private keys and public addresses.
We can execute two functions in a regular wallet:
- Place your money inside the pocket to store it.
- Take the money out of it and give it to someone else.
- Your public address is where people can give you a crypt.
- You can open your crypt and use it every way you like using your private key.
A cryptocurrency wallet is a software or computer that stores your public address and your private key. It can also be used to obtain and use your crypt. The wallets can be classified into the following categories:
There are crypto wallets that are actively linked to the Internet. Although it’s easy to use these wallets, they’re vulnerable to hacks. Exchange wallets, smartphone wallets and wallets are examples of hot wallets.
Cold wallets are crypto wallets that are not linked to the internet and thus secure from hack attempts. Paper wallets are an example of a cold wallet. The theory is that if you want to keep your cryptocurrencies secure, you should use a cold wallet to keep them safe.
Hardware wallets merge the safety of cold wallets with the ease of dealing with hot wallets.
Specifications of Hardware Wallets
Hardware wallets are physical gadgets that serve like a flash drive and hold your private keys. The device is safe enough that you can still use it on a device you don’t trust. The great thing about using hardware wallets is:
You’ll keep your wallet disconnected in your pocket or purse at all times. This means that the wallet is cold and off the net.
Whenever you need to transfer your crypto, simply attach your wallet to a machine or tablet, enter your PIN code, and send the money. When the transaction is done, you disconnect it and keep it in a secure location.
What is you lost your wallet?
The most important thing you need to know is that the private key never leaves the hardware bag. The entire transaction confirmation process is conducted inside the hardware wallet itself and not on the device. Standard offline wallet clients only use private keys from your standard hard drive or mobile unit. Unfortunately, what this means is that they are freely accessible and vulnerable to threats. You can still hold private keys on your encrypted hard disk, but to use it, you’ll need to decrypt it, leaving your keys vulnerable immediately.
Hardware wallets, on the other hand, do not display private keys except during transactions. Here’s a short overview of how this works:
- The hardware wallet will ask the wallet software running on your computer or smartphone to provide payment details such as the requested amount and the target address.
- As soon as the hardware wallet receives the data, it will wait for the user to validate, sign the transaction, and finally send the digital signature back to the software. This is going to finish the deal.
The main reason why we need to use a hardware wallet is to protect users and funds from ransomware attacks, computer viruses, and other remote hazards. Having said that, hardware wallets are not 100 % secure.
In comparison, if you have an attacker attacking you with massive quantities of money, time , and energy, it would be difficult to defend you from them. However, let’s presume that you don’t have a megalomaniac arch-enemy threatening you for the sake of this post.
Best Hardware Wallets: Ledger
The Paris-based Ledger is one of the most respected and efficient hardware wallet firms in the world. They use their proprietary technologies to develop defense and infrastructure solutions. They have manufacturing plants in Vierzon (France) and headquarters in San Francisco. The business was launched in 2014 and sold 1,000,000 units in more than 165 countries.
At the heart of their creativity lies a distinct operating system named BOLOS, which either incorporates a protected chip for their wallets or a Hardware Security Module (HSM) for different business solutions.
The organization is also preparing to deliver the Ledger Vault, a security solution for banks , hedge funds and family offices who wish to invest in cryptocurrencies. Speaking of Vault, co-founder and CEO Eric Larchevêque said:
“We’ve built our operating system into a stable chip for wallets, and we’re incorporating it into a hardware security module for the Vault. The concept behind it is to include extra functionality and facilities, such as multi-accounts, multi-signatures or timelocks.
Now that you have an idea of Ledger, let’s take a look at their two flagship wallets – Ledger Nano S and Ledger Nano X.
Ledger Nano S
Ledger Nano S comes in a neat little box containing the following:
- Ledger Nano S disk
- 1 mini USB cable
- Lanyard to wear a computer around the neck
- One keychain and one keyring
- Recovery sheet for writing down the keyword of the seed.
As per the Ledger website, the Nano S natively supports 1184 coins. This include several of the main coins, such as:
- Bitcoin (BTC)
- Ethereum (ETH)
- Ethereum Classic (ETC)
- Litecoin (LTC)
- Bitcoin Cash (BCH)
- Binance Coin (BNB)
- Cardano (ADA)
- EOS (EOS)
- Monero’s (XMR)
- Ripples (XRP)
- Stellar (XLM)
- Tether (USDT)
- Tron (TRX)
- Zcash (ZEC)
Pros and Cons
- The setup is easy and straightforward.
- Ledger Nano S is capable of running third-party applications, and there are currently 18 installable applications on the platform.
- Ledger Nano S supports a wide range of coins.
- Integrates a wide range of software wallets.
- It’s a very inexpensive hardware wallet ($59) with a very high value proposition.
- The whole recovery process can only be performed from the system without ever linking it to the network.
- Ledgers features secure chip technology.
- Very inconspicuous looking because it seems like a regular pen-drive. Plus, it’s pretty lightweight, so it’s easy to cart around.
- Not the open source hardware.
- The recovery sheet can be stolen or repeated if adequate caution is not taken.
Ledger Nano X
Nano X has a credible argument to be the strongest hardware wallet on the market right now. It looks pretty cool, and it’s really stable. It’s actually valued at $119. Nano X has excellent protection due to the use of two chips. It also has a Bluetooth feature that allows users to use the Nano X with their phone or laptop without the need for a cable.
The biggest discrepancy between Nano X and Nano S is that the former will possess many cryptocurrencies at once. In Nano S, users had to manually install and uninstall applications to use a specific wallet. However, users can load several crypto wallets on Nano X at the same time.