Cryptocurrency hardware wallets
If you have Bitcoins in abundance and you might wary of leaving them on Bitcoin exchange, online wallet, or software wallet. Then the most secure way to take your coins offline altogether with a cryptocurrency hardware wallets. It is a device that can be connected to your desktop, laptop, tablet, and smartphone. These are as secure as any other cold storage like a paper wallet and can be as comfortable in day to day transaction like an online wallet.
Cryptocurrency hardware wallets offer more security than other types of wallet. They are designed to keep private keys of your currency in an offline setting. Private keys are generated via your wallet when you needed to spend Bitcoins. Your Bitcoins will always be safe even if your machine gets hacked or someone stole your hardware wallet. Because without knowing the secret pin of your hardware wallet nobody can transfer your currency to any other address or device.
How to set up your cryptocurrency hardware wallets
- When you set up cryptocurrency hardware wallets in most cases you have to install a software in the device you are connecting your hardware wallet.
- It is important to create a backup of your seed keys. This allows you to restore your wallet when the device is broken or stolen.
- To do this, you usually have to write down seed keys or recovery phrase somewhere safe or the backup is automatically saved digitally on the device. You can also write down your seed keys or recovery phrase in 3 to 4 places and distribute it.
- Then choose a pin or code to protect your wallet from hackers or any unintended access.
How Cryptocurrency hardware wallets works
Cryptocurrency hardware wallets keeps a portion of your wallet offline or an external pre-installed disk. It works a bit like sofa box that you have to approve all your transaction through hardware wallet. This is because all private keys encrypted are stored on your device. So even if you connect your hardware wallet on any compromised machine, it will be immune to malware, trojan or any kind of threat which is accessible on the connected machine.
Basically, how hardware wallet works are? on connecting the wallet to your computer the transaction is entered into your terminal software which you installed on the computer, but the transaction is then encapsulated on the hardware wallet. All necessary data are sent to the hardware via USB, Bluetooth, NFC or via other transmission options. This means that your private keys will never leave the device. Hence, no transaction can be done without the approval of your hardware wallet.
Best cryptocurrency hardware wallets in market
In this post, we are going to discuss four best cryptocurrency hardware wallets available in the market. We will do an in-depth analysis of all three best hardware wallets and will compare their features. These three cryptocurrency hardware wallets are Ledger Nano S, Trezor hardware wallet, and KeepKey hardware wallet.
Ledger Nano S is a USB device with smart card security in a very compact package.
It was developed in France by three France companies BTchip, Chronocoin, and La Maison du Bitcoin in December 2014. It is a compact USB device with an extra security layer.
The smart card provides an additional security layer and eliminates some safety issues that may arise due to any compromised device which is based on multipurpose microcontrollers.
It comes with a tiny screen that means you can operate it independently of your computer otherwise, it can be vulnerable to malware.
The controls are pared back to two buttons on the top of the device, which is used for everything from scrolling through menus to entering your PIN. The Ledger Nano S
The Ledger Nano S supports FIDO second factor authentication for use on things like Gmail and GitHub.
Features of Ledger Nano S hardware wallet
1.Appearance – Although the appearance of cryptocurrency hardware wallets is not their most important aspect but appearance can give us an idea of some important aspects like usability and durability.
Ledger Nano S hardware wallet is made up of brushed stainless steel and plastic.
It weighs only 16.2 grams. It is second most lightweight cryptocurrency hardware wallet after Trezor hardware wallet.
It uses ST31H320 + STM 32F042 chip. It’s size is 98 X 8 X 9 (mm). It is second most smaller cryptocurrency hardware wallet after Trezor in industry.
It has a good level of drop resistance. As it has a rotating cover when folded its drop resistance level increases.
2.Compatibility – Ledger Nano S hardware wallet is compatible with Windows (7+), Mac (10.8+), Linux or Chrome OS. Besides, it requires Google Chrome extension or Chromium extension to be used in order to connect to the hardware Bitcoin/Ethereum wallet.
3.Security – Ledger Nano S provide a high level of security like other cryptocurrency hardware wallets. It is superior but not weaker than none. Security features it provides are:-
- Ledger Nano S is based on a dual chip architecture (ST31/STM32, Certification level: CC EAL5+). The firmware integrity is guaranteed by cryptographic attestation.
- Ledger Nano S ensures only you can access your accounts by requiring a 4 digit PIN code each time it is plugged into your computer.
- Your cryptographic secrets are never exposed to the outside world.
- Your private keys are never held or known by Ledger or a third party: they are hard locked in the Secure Element.
- It offers 24 words recovery seed which helps in recovering wallet data in case your wallet is stolen or broken.
- It also offers AutoLock. This enables Ledger Nano S to automatically lock itself after a certain period of inactivity.
- Ledger Nano S hardware wallet can be set without being connected to any system or internet. Hence, wallet setup is completely isolated.
- Another feature of the wallet is that recovery seed is not displayed on computer screen. Hence, even if you used your wallet on the compromised machine your recovery seed will only be known to you.
4.Cryptocurrency support – Ledger support almost all cryptocurrencies. Altcoins it supports are:-
Bitcoin Ethereum Litecoin FIDO U2F
Dogecoin ZCASH DASH STRATIS Ripple Hello Bitcoin Cash Komodo Ethereum classic POSW ARK
Ledger Nano S wallet operates with its own cryptocurrency wallet interfaces. Ledger Apps (free Google Chrome applications). You can also use other compatible software wallets like:-
Ledger wallet Bitcoin, Ledger wallet Ethereum, Ledger wallet Ripple, Copay, Mycelium, Electrum, MyEtherwallet, Greenbits, BitGo
5.Pricing – Ledger Nano S is the cheapest cryptocurrency hardware wallet in the market. Priced at 83.60$ it offers the same functionality as other cryptocurrency hardware wallets (in some cases it surpass them). It is a feature rich hardware wallet which doesn’t put the extra burden on your pocket.
Pros of Ledger Nano S hardware wallet
1.Compact and stylish device.
2.Supports the most number of altcoins in Cryptocurrency hardware wallets industries.
3.Compatible with all major operating software
4.Good level of drop resistance as it has rotating cover and drop resistance increases when folded
5.Comes with a two button controlling system, which allows you to browse the menu and confirm transactions.
6.Lightweight weighs only 16.2 gm. Easy to carry.
7.Cheaper in comparison to other cryptocurrency hardware wallets.
Cons of Ledger Nano S hardware wallet
1. The Manufacturing quality of Ledger Nano S hardware wallet is not very robust, although it is made up of brushed steel still it looks fragile.
2. The click buttons are sometimes not registered or are registered multiple times with one click.
Trezor is the first cryptocurrency hardware wallet come into existence in August 2014. It is founded by a Czechoslovakia company satoshi labs. The Czech built Trezor has many similarities with Ledger Nano S. In native language, it translates to “vault”. Because of its unparallel security features, it is also called as Bitcoin safe. Like other cryptocurrency hardware wallets, it comes with an OLED screen and can be used for password management and document signing. It generates 24 words recovery seed and 9 digit pin which can be used for recovering the private key in case device is broken or stolen.
Features of Trezor hardware wallet
1.Appearance – It is most lightweight cryptocurrency hardware wallet and only made up of plastic rather metal. It weighs only 12 g. Its overall size is 60mm x 30mm x 6mm. Hence it is lightweight and smaller in size comparing to Ledger Nano S hardware wallet. So if you love a compact and smaller size device then Trezor should be your first choice. Trezor also has two buttons designed to manage wallet software, same as in Ledger Nano S hardware wallet. As Trezor is made up of plastic and Ledger Nano S is made up of brushed steel but both devices have the same level of drop resistance because of their individual construction.
2.Compatibility – Trezor is compatible with both desktop and mobile devices. It can be connected to Window, MacOS, Linux, and can also be connected to Android devices. There is also a Chrome extension that allows managing hardware device and information stored in it. It can be connected to android apps like Trezor wallet, Mycelium (Bitcoin Android wallet), and Multibit HD.
3.Security – Like Ledger Nano S it also comes with two physical buttons, but these buttons are placed on the front panel, unlike Ledger where buttons are placed on the side panel. These buttons are used to confirm the transaction and to get any other kind of authentication.
- You can instantly wipe your Trezor device in case of an emergency.
- It generates 24-word recovery seed which can be used to recover all your funds in case your device is stolen or broken.
- Like any other cryptocurrency hardware wallet, your private keys are stored in an offline environment.
- It offers 4 digit pin authentication like other cryptocurrency hardware wallets.
- Encryption passphrase can be set on top of the PIN. This protects the device in case of a seizure. It’s using military-grade encryption of the seed on TREZOR storage, so even torturing the device in a laboratory won’t leak your private keys.
- It is CE and RoHS certified (quality, reliability and environmental standards).
4.Cryptocurrency Support – Cryptocurrency supported by Trezor wallet are:-
Bitcoin Ethereum Litecoin Dogecoin ZCASH DASH Bitcoin Cash Ethereum classic
Namecoin, Bitcoin Testnet, ERC -20 Tokens
Trezor wallet supports less currency than Ledger Nano S hardware wallet and one of them is Ripple.
5.Pricing – Trezor cryptocurrency hardware wallet is priced at 89$ which is 10$ more than Ledger Nano S wallet.
Price of Trezor wallet is decent and it is ‘value for money’ product
Obviously, it is the first cryptocurrency hardware wallet developed and is more reputed and popular than any other cryptocurrency hardware wallet in the industry.
Pros of Trezor hardware cryptocurrency wallets
1.High quality and premium body.
3.Lightweight weighs only 12 gm, convenient to carry.
4.It is extremely secure and intuitive
5.Minimal and robust design
6.Supports almost all major currency and altcoins
7.Great support provided by Trezor team.
Cons of Trezor cryptocurrency hardware wallets
1.The price is a bit higher than Ledger Nano S.
2.Ripple is not supported
3.Made up of plastic, not of steel.
Keepkey is the last hardware wallet in our list of cryptocurrency hardware wallets. It offers the same functionality as of Trezor and Ledger hardware wallet. It has a much larger screen which makes it little inconvenient to carry.
But KeepKey’s large display gives clarity to every digital asset leaving the device. Each transaction must be manually approved using KeepKey’s confirmation button.
Like other cryptocurrency hardware wallets, KeepKey works with the wallet software on your computer by taking over the management of private key generation, private key storage, and transaction signing.
KeepKey generates the private key using its hardware-based random number generator, combined with randomness provided by your computer. Once your private key is generated, you can write down a backup of your KeepKey in the form of a twelve-word recovery sentence.
Features of KeepKey hardware wallet.
1.Appearance – KeepKey is largest in size comparing to Ledger and Trezor. KeepKey is made up of Aluminium metal and Polycarbonate so it tougher and durable than Trezor hardware wallet which is made up of plastic. It weighs more than both Trezor and Ledger Nano S hardware wallet. Its dimensions are 38 X 93.5 X 12.2 mm. But larger size doesn’t really mean you can’t carry it, but it is obvious, it is more inconvenient to carry in the pocket.
2.Compatibility – KeepKey hardware wallet can be connected to Window, Mac OS, Linux and also to Android devices. It can be connected to other software wallets like Electrum, Mycelium, and MultiBit. It is very easy to navigate on KeepKey interface, there is no ‘fuss’. This is one place where it excels from both Trezor hardware wallet and Ledger Nano S hardware wallet. It also has inbuilt shapeshift cryptocurrency exchange to exchange the assets.
3.Security – It offers same security features as in Trezor and Ledger S wallet. But it uses a single chip like Trezor wallet whereas Ledger Nano S uses two chips.
- As it has a larger screen so that adds extra security feature of wallet recovery using the cipher.
- It offers hidden/alternate wallet which can be accessed via passphrase
- It generates 12 words Recovery seed which is useful while recovering your wallet information in case your wallet is stolen or lost.
- It offers 4 pin authentication to confirm a transaction.
- Virus- and malware-proof.
4.Cryptocurrency support – KeepKey hardware wallet supports six cryptocurrencies.
Bitcoin, Ethereum, Litecoin, Dogecoin, Dash, Namecoin, and more coming soon.
5.Pricing – KeepKey hardware wallet is Priced at 129$. Which is somewhat decent when considering it is made up of metal and has a bigger screen.
Pros of KeepKey hardware wallet
1.Tougher and durable. Full aluminium metal body.
2.Large display screen.
4.Elite wallet. Give a premium feel.
5.Support is top notch.
Cons of KeepKey hardware wallet
1.Costly, not suited for the new buyers with small Bitcoin investment.
2.Heavy, not super easy to carry.
3. Relatively new in comparison to Ledger Nano S and Trezor cryptocurrency hardware wallets.
Cons of cryptocurrency hardware wallets.
Although hardware wallets are safest and secure way to store your Bitcoins. But there is a downside of hardware wallets if you lose access to your Recovery phrase, password, and security pin etc. Then there is no way you can recover your security information.
So it essentially means you have lost your Bitcoins as someone has stolen them from you. It is important to make a two to three copy of this information and save them two to three different locations from where you can access them in case of mishappening. Using some prudence and a bit of common sense can help you to enjoy the world of Bitcoin while being safe and secure the entire time.
Every hardware wallet listed above are of high quality and have their own unique features but they all have one thing in common i.e. they are extremely secure and have been trusted by the cryptocurrency community. You can get one or two hardware wallets from the above-mentioned list which best fits your requirement and budget.
Do note that due to the recent surge in demand for Bitcoin and other cryptocurrencies, hardware wallet is often listed as out of stock on Amazon and other E-commerce websites. So if you are thinking to involve in cryptocurrency game for the long term then you should buy at least one hardware wallet by making a small one-time investment.