A hardware wallet is a wallet everybody serious about crypto should consider using.
Bitcoin, the world biggest and most famous cryptocurrency, is becoming more and more popular.
More and more people want to get the piece of the coin that may disrupt the entire financial system and bring the change to the world we were always looking for.
But, as it is decentralized and there is no intermediary between the sender and receiver, in case your coins get stolen, the transaction is irreversible and they are lost forever.
It means you have to take some time to do research and find the best solution for safely storing your coins. (What is Bitcoin wallet and how to protect your coins?)
You are in the right place because in this article we will write about the hardware wallets that are considered to be the most secure cryptocurrency wallets in the market.
Table of content:
- What is the cryptocurrency wallet?
- What are the types of cryptocurrency wallets?
- Why is it best to hold your coins on a hardware wallet?
- What is a hardware wallet?
- How to use a hardware wallet?
- Which are the best hardware wallets?
- What is a ledger hardware wallet?
- What is Ledger Nano S?
- What is Ledger Nano X?
- What is the Trezor hardware wallet?
- Which hardware wallet to choose?
A cryptocurrency wallet is a secure digital file used to access, send, and receive your cryptocurrency.
You won’t use a leather wallet for storing your coins, nor you will have a signed contract declaring the ownership of the cryptocurrency.
It is essential to understand that the cryptocurrency wallet doesn’t store your coins but contains the permissions you need to access your coins that are on the Blockchain.
They allow individuals with little or no knowledge to interact with Blockchain and transact value globally without any barriers.
There are two main types of cryptocurrency wallets, hot and cold wallets.
The hot wallets are the type of wallets that are actively connected to the Internet.
Even though they offer an easy and convenient way of accessing and transacting your coins, they are vulnerable to hacks.
Because of their convenience, it is suggested to hold part of your coins there for everyday use but the major part should be stored in a safer place, cold wallet.
Some examples of hot wallets are web wallets, mobile wallets, desktop wallets, and the wallets offered by cryptocurrency exchanges.
The cold wallets are the types of cryptocurrency wallets that are not connected to the Internet and hence safe from hacks.
As mentioned above, cold wallets are the place you want to hold a major part of your cryptocurrency portfolio because they offer the highest level of security.
There are two main types of cold wallets, paper wallets, and hardware wallets.
The stats from the graph below will be more than enough to realize the importance of storing your coins in a secure place.
Remote attacks such as malware attacks or computer viruses are the biggest danger for your coins.
An experienced hacker can easily find the way to access your coins if you don’t take the required steps to secure your cryptocurrency wallet.
The most significant advantage of a hardware wallet is that is stores your private keys inside the device, and they never leave the device itself.
Your coins are protected even when you plug it into a device compromised by malware.
With exchanges being hacked left and right, you should make your main priority keeping your valuable crypto holdings secured.
Storing your Bitcoin on a hardware wallet will ensure that the stored coins are as safe as they can possibly be.
A hardware wallet is a small secure physical device that holds your private keys secure in an offline environment.
Due to its built-in encryption, it makes private keys unrecognizable to any unauthorized parties, which makes hardware wallet immune to computer viruses.
For instance, using a desktop wallet on a computer that is compromised by malware would be a suicidal act.
On the other side, you can use your hardware wallet even on a compromised computer or phone and your coins and private key will be safe and secured.
If your hardware wallet gets lost or stolen, you can gain access to your coins by using backup keys on a desktop wallet, such as Electrum.
It protects you against both physical and virtual theft.
To send your funds from a hardware wallet, you need to connect it to a computer.
Then it is required to prove your identity by entering a PIN code for the wallet.
You will be logged into the hardware wallet where you can manage your funds.
Once done, disconnect the hardware wallet and store it somewhere safe.
Your private keys never leave the hardware wallet.
The entire process of validating the transaction is done on the hardware wallet itself and not on the computer or any other device.
The hardware wallet asks the wallet software running on your computer to provide details about the payment such as the requested amount and the recipient wallet address.
Once the hardware wallet receives those details, they will be awaiting user confirmation to sign the transaction.
Then it will send back a digital signature to the software that will complete the transaction.
When choosing a hardware wallet, you have to be very cautious because that will be the place you will be storing the majority of your cryptocurrency portfolio.
We will point out and review two hardware wallets that established their position at the top in the field of hardware wallets.
Either one you choose for yourself, make sure to buy them directly from an official website or authorized reseller.
The hardware wallets bought from third parties can be compromised by malicious software that may endanger your future cryptocurrency holdings.
There have been many cases of fraud reported by people who bought hardware wallets on eBay and sometimes Amazon.
The Ledger company was launched in 2014 by eight people with backgrounds in embedded security, cryptocurrencies, and entrepreneurship.
The main idea of these people was creating secure solutions for blockchain applications.
At the moment of writing, they have over 130 employees in Paris, Vierzon, and San Francisco.
They developed a distinctive operating system called BOLOS.
They integrated this OS either to a secure chip for the Ledger wallet line or to a Hardware Security Module (HSM) for various enterprise solutions.
This was just an introduction to the company so you can see that we are talking about a serious player.
The only disadvantage of the Ledger is that its code is not fully open-sourced.
While they claim that it is necessary in order to keep the security level at the highest point, this is something that you should be aware of.
When code is not opened to the public, they can insert malicious lines of code that can endanger your private keys and ultimately your entire portfolio stored on a hardware wallet.
So far, we didn’t read an article where someone claims that he/she lost coins because his/her wallet was compromised by the Ledger itself, which is pretty nice to know.
They developed two hardware wallets, Ledger Nano S and Ledger Nano X.
Ledger Nano S is a hardware wallet developed by the French company Ledger that comes in the form of a USB device.
Its sizes are similar to a flash drive, weighing in 16.29g and measuring 56.95mm x 17.4mm x 9.1mm.
The private keys will be stored inside the device and they will never leave the device itself.
Even when you accidentally plug in your ledger nano s hardware wallet into a compromised computer, the coins, together with the private key, will be safe.
You can store 22 different coins and ERC-20 tokens.
On the video below, you can see what you will get by ordering a Ledger Nano S.
Once your order arrives, it’s time to set up your wallet.
Following the video below, you will learn how to set up your Ledger Nano S hardware wallet.
Do the exact steps that were mentioned in the video and you will set up your Ledger Nano S hardware wallet.
It is very important to keep recovery seeds in a safe place because the only way for someone to access your coins is by using the recovery phrases (backup key).
The next step is downloading the Ledger Live app that will help you manage your coins stored on Ledger Nano S.
In order to use your Ledger Nano S, you need a software that will help you send and receive coins.
Ledger Live is a software that enables this option.
To download Ledger Live, click here.
The link will lead you to the official page that will offer you download options for MAC OS, Windows, and Linux.
Once downloaded, you can finally send cryptocurrency to your Ledger Nano S hardware wallet.
Here is the little short video that will lead you to how to activate Ledger Live and send coins to Ledger Nano S (In the video they used Binance exchange for example, but the same principle is used for any other exchange or wallet).
If you want someone to send you coins to Ledger Nano S, copy the coin wallet address and send it to him/her.
As you’ve learned how to receive cryptocurrency to your wallet, it is time to learn how to send coins from your Ledger Nano S hardware wallet.
The first thing you need to do is to install the app for the required coin.
In the video below, you will be guided on how to do that
Once the app is installed, you can send your coins from your Ledger Nano S.
Here is a guide that will help you learn how to send a cryptocurrency from your Ledger Nano S.
The price of Ledger Nano S is 59.99€.
If we consider that it will protect your crypto holdings, the price is pretty affordable comparing to the potential price of losing your coins by a hacking attack.
This is not an affiliate link but just a direct link to the official store to make sure that you will buy from the original website.
Try to avoid buying from eBay, Amazon, or third parties because trying to save a couple of dollars may cost you losing your entire portfolio.
I think the reward is too small to expose your entire portfolio to potentially malicious software that may be in that hardware wallet.
The Ledger Nano X was developed by the same company as Ledger Nano S and was meant to be an upgraded version of Ledger Nano S.
You can store 22 different coins and 1250 ERC-20 tokens.
It also has a Bluetooth feature that enables you to manage your crypto without plugging it into the computer or mobile phone.
The concept of these two hardware wallets is the same.
They both secure your coins in the same way but Ledger Nano X comes with more features.
It allows you to store more applications at the same time, you can activate it via Bluetooth.
There is no difference in the level of security between these two.
The price of Ledger Nano X is 119.99€, which is double the price of Ledger Nano S.
It is up to you which one to choose, I am personally using Ledger Nano S since 2017, and I never had an issue.
I also got a Ledger Nano X that works pretty fine so for me that’s an even battle.
If you are looking to get a cheaper deal, you can choose Ledger Nano S and you will be protected the same way you would be by using Ledger Nano X.
After ordering your Ledger Nano X hardware wallet, on the video below you can see what you will receive in the box.
Once you get it, you need to set up your Ledger Nano X wallet and pair it with your phone.
Following the video below, you will be guided on how to do that.
After you set up your Ledger Nano X hardware wallet, it’s time for you to deposit the first coins to your hardware wallet.
The video below will shortly explain how to receive deposits to your Ledger Nano X.
The device itself is very secure because the private key is stored inside the device but what you should keep in mind is to secure the recovery phrases (backup key).
If someone finds the way to access the backup key, you can easily lose all your holdings.
Not securing your recovery phrases is the only thing that can endanger coins stored on a Ledger hardware wallet.
As mentioned above, the price of a Ledger Nano X is $119.99, making it twice as expensive as the Ledger Nano S.
If you decide to buy a Ledger Nano X instead of Ledger Nano S, click here to get the link to the official site.
A hardware wallet from third parties can be compromised by malicious software that can endanger your future holdings.
That’s why we advise buying only from Ledger or authorized resellers.
Trezor was the first cryptocurrency hardware wallet launched in August 2014.
Same as Ledger, it stores private keys in an offline environment secured from vulnerable attacks.
Even if you use it on a malware-infected computer, your private key and coins will be safe.
It is a key-sized device and to use it, you need to plug it into the computer.
Every Trezor hardware wallet same as Ledger is protected by the pin that you set up at the configuration of the new device.
But, what is specific for Trezor is that after every incorrect guess doubles the wait between guesses, and for example, it would take 17 years for 30 guesses.
If you set an 8-digit pin, it will be almost impossible for someone to guess it just by luck.
Same as Ledger, it developed two hardware wallets, Trezor One, and Trezor Model T.
The Trezor Model T is the newer one launched in 2018 that comes with the additional features but also with 2.5 times higher price.
In terms of security, the coins will be secured on both devices so there is no big reason for us to suggest you Trezor Model T over Trezor One that was the initial product by the Trezor.
The price of Trezor One is 59€ while Trezor Model T is priced at 149€.
Either you choose for Trezor One or Trezor Model T, you will make a great choice because Trezor wallets are well known for its security.
As always, buy directly from the Trezor site or authorized reseller.
Never think of buying from someone else trying to save $10-20 because those same dollars may cost you losing your entire cryptocurrency portfolio.
Click here to get the direct link to the official trezor website.
As I am personally using Ledger wallets, I can not write from my personal experience about Trezor wallet set up.
That’s why I will link you to the official guides done by the Trezor team that include all the necessary information for you to set up your Trezor hardware wallet.
Click here for a direct link to the Trezor One guide.
Click here for a direct link to the Trezor Model T guide.
That’s a secondary question you should ask yourself.
The main question is Do I need a hardware wallet?
If you are serious about securing your crypto portfolio, spending $50-100 on a hardware wallet is nothing compared to a potential loss you can face by a hacking attack.
Those attacks happen and will continue to occur over and over again.
Whichever you choose of these two, it will help you protect and secure your cryptocurrency portfolio.
As a Ledger user from 2016, I have to give a little advantage to Ledger hardware wallets just because I used them and in my case, they were better than expected.
Either one you choose, keep one thing in mind.
The hardware wallet itself is almost impossible to hack unless you keep your backup key on a place where a hacker can get his hands on.
Keeping them on your phone, computer, or somewhere online is a suicidal act.
The recovery phrases should be in an offline place where only you can get access to.
I hope the guide helped you get more information and insights about hardware wallets and its characteristics.
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