The cryptocurrency world is dangerous – this is a well-known fact – and that’s why having a hardware wallet is necessary.
You need good storage when working with crypto, and there are several of them, including soft and hard options.
Soft wallets include online wallets and software wallets. Both are services and apps that allow you to access your crypto assets from your browser or computer/phone when it’s connected to the internet. However, using such methods can expose you to malicious actors who can steal your cryptocurrencies.
Hard wallets include paper and hardware wallets. Paper is reasonable and secure, but it means typing your private keys every time you want to perform a transaction, which can be exposed if your device is compromised.
Hardware wallets are the most secure. In this article, I will explain what they are, how they work, why you should be using one, and the best hardware wallets on the market.
What is a Hardware Wallet?
A hardware wallet is an offline physical storage wallet for private keys.
They come in different shapes; some look like a USB stick, some a small tab, and so on. This physical device enables you to verify transactions on its screen while keeping your private keys offline. As a result, if a malicious actor succeeds in getting control of your computer, they will not be able to access your private keys to steal your crypto coins.
I have mentioned “private key” a few times, so it’s only fair to explain what it is.
What is a Private Key?
A private key is a piece of critical information used to authorize outgoing transactions on the blockchain. It is a string of numbers and letters that allow you to access your cryptocurrency and the crypto ecosystem.
With your private key, you can spend your funds, and if you lose your private key, you lose access to your cryptocurrency. If someone else gets access to your private key, they can steal your coins.
Given its crucial purpose, it’s not a surprise that malicious actors constantly try to steal them, whether through malware or disguised emails. You must keep your private keys secure.
Benefits of Hardware Wallets
I have mentioned a benefit several times above. To be clear again, I will make that the first point.
The main benefit of using a hardware wallet is security. Hardware wallets isolate your private keys from the internet and reduce your risk of being compromised in an online attack. Even if you plug them into an infected PC or smartphone, there will be no risk of your private key leaking to a hacker somewhere.
For that reason, they are often called cold storage and are widely considered the most secure wallet and way to manage your cryptocurrency, especially if you have many coins.
2. Manage Many Assets From One Place
If you have used software wallets up till this time, you might have already experienced how inconvenient it is to manage multiple crypto assets. Many software wallets can only handle some coins or blockchains simultaneously.
You don’t get that limitation with most hardware wallets. They allow you to manage Bitcoin, Alt. Coins, Ethereum, and more on the same device. That brings me to the next point.
3. Convenient and Portable
Many hardware wallets are small and easy to carry, smaller than most modern smartphones. Even more beneficial is their convenience. They are a small plug-in device that you can use to log in to many decentralized applications without creating accounts on them.
Some platforms even let you trade directly from your hardware wallet rather than depositing crypto on an exchange wallet, saving you time.
If you’re bothered about someone getting access to your device, that shouldn’t be a problem because you can lock them and back them up with a recovery seed phrase or pin.
How do Hardware Wallets Work?
The first thing you need to have in mind is that your crypto is not on the hardware wallet. Cryptocurrencies always live on the blockchain. Your hardware wallet allows you to store your private key, and that key provides access to where your cryptocurrencies are stored on the blockchain.
When you create a transaction, it is sent to the wallet to be signed by the private key. You will get that prompt in your hardware device; you can then confirm it. That signs and sends it back to the software where the transaction began, which then broadcasts it to the crypto network.
Limitations/Disadvantages of Hardware Wallets
Every good thing has limitations, sadly. For hardware wallets, that is, they aren’t digital. So, if you lose your physical wallet, you would lose the money in your hardware wallet forever.
So, if you get a hardware wallet, it’s best to store it in a secure place that is fireproof. If possible, do not take it out of the house (if your house is secure). Also, store your seed phrase in a safe place, ideally somewhere outside of the internet like a paper in a safe.
Hardware wallets are not ideal for making frequent transactions. If you’re going to be exchanging coins every day, it’s best to transfer some amount to a crypto exchange for that. Hardware wallets are best for long-term storage.
Also, nothing is entirely safe though hardware wallets are the most secure. For example, in 2020, the Ledger website was hacked, and the hackers gained access to customers’ information, including emails and names. Some of those were used in phishing attacks and ransom demands (Yes, some customers received emails threatening them to pay a ransom).
Despite that, it will be tough and almost impossible to break into the actual device to gain access to the private keys.
Should I Get a Hardware Wallet?
Yes, but it also depends.
Hardware wallets are the most secure way to store your private keys. If you have a large amount of cryptocurrency, this is the best way to keep it safe. If you’re just testing waters with a few coins, it might not be something you’re looking to invest in.
Nevertheless, for those looking to own many cryptos or take it seriously, they are worth the money. Just ensure you buy a wallet from a company you can trust, so you are sure of getting a legitimate device and not something that is tinkered.
Best Hardware Wallets in the Market
There are many hardware wallets in the market. We have chosen the best hardware wallets based on a few things:
- The company history: years in business
- The reputation of delivering secure and reliable products
- The number of platforms that support the wallet
- Interface and ease of use
Based on that, here are the best hardware wallets you can get and should consider. I have grouped them by brand.
Ledger is a leading company in the hardware wallet space. It is one of the most respected and credible companies with leading technology and infrastructure. Ledger has been in business since 2014 and has sold over 1,500,000 units in more than 165 countries.
They use an operating system called BOLOS to integrate a secure chip for their crypto hardware wallets. It handles security with a pin code and a backup 24-word recovery phrase.
Also, there is a ton of support in terms of software integration. For example, if you want to do Celo yield farming and authorize transactions with your Ledger hardware wallet because Celo supports Ledger integration. Furthermore, it supports 1000+ coins and all ERC20 tokens.
For support, it has a comprehensive knowledge base and ticket system. Now, let’s look at the products. The company has two wallets, and they are among the leading devices on the market.
Ledger Nano X
The Ledger Nano X looks like a typical USB drive. You can connect the Nano X with a computer or mobile device through a USB connection or Bluetooth.
You can install up to 100 apps on your device. That number depends on the app size, though. Nevertheless, it is pretty large, which means you can work with a ton of assets and apps without having to uninstall anyone when you need another.
You can manage your bitcoin, Ether, Litecoin, and more on the Ledger Nano X. It uses a rechargeable battery system that lasts up to 8 hours on standby. The Nano X goes for $119. You can purchase the Nano X by clicking on this link.
Ledger Nano S
Ledger Nano S is the flagship product of Ledger and is quite cheaper than the Nano X (about half the price). It is a widely used wallet crafted in a compact USB device.
However, it lacks some features that Nano X has. Depending on your needs, those features could be a deal-breaker. They include Bluetooth connectivity, mobile support, and a fewer number of apps supported. The Nano S supports up to six installed apps.
Like the Nano X, the Nano S supports BTC, Bitcoin Cash, Binance Coin (BNB), Cardano (ADA), Dash (DASH), Dogecoin (DOGE), Eos (EOS), ETH, and thousands of several others. The Nano S is $59. You can purchase it by clicking here.
Trezor released the first legitimate and secure hardware wallet, and for a while, it was the only one in the market. As of 2018, it has sold over 1.3 million units. Its wallets look more like a calculator and though not as sleek looking as Ledger’s, is still among the leading devices.
Trezor has an Android app called Trezor wallet, but its hardware wallets are compatible with Windows, macOS, Linux, and Android.
Unlike Ledger, Trezor’s firmware and software are open-source. That means bugs can be identified easily, but some might say it comes with a security risk. However, with closed source software, the community doesn’t know what’s going on in there, so that has risks too.
Trezor supports over 1000 coins and all ERC20 tokens on the Ethereum network.
Trezor is secured with a password that you input on its screen or a connected device like a laptop. Also, there’s a PIN system in Trezor that prevents brute-force attempts by increasing waiting time each time an incorrect guess is made. You could wait for 17 years if you make 30 wrong guesses. If you ever lose your device, you can simply recover it with the 24-word seed and passphrase.
Now, let’s look at the best devices from Trezor.
The Trezor T is a compact wallet that can hold your private keys and also be used as a U2F hardware token. You can connect it to your computer or mobile device using a USB type C cable.
It has a touchscreen display which is larger than most portable hardware wallets in the market. The Trezor T is a good balance of security and convenience. It supports over 1200 cryptocurrencies and goes for 149 EUR. To get yours, click on this link.
Going for almost the same price as the Ledger Nano X, we have the Trezor One at 48.76 EUR. It was the first hardware wallet that was released. Trezor T built on it to add more features and coins.
You can connect the Trezor One using a micro USB connector. The device also has the U2F feature of the Trezor T, and it supports over 1,000 coins but less than the number that the Trezor T supports.
Unlike the Trezor T, the screen isn’t large enough for password and Pin entry, so you will need to enter those on your computer or mobile phone when you have connected the device. Nevertheless, it carries the security that Trezor is known for. Click here to purchase the Trezor One.
3. GridPlus’ Lattice1
GridPlus is a company that sells crypto security products: hardware wallets and SafeCards. Its hardware wallet is called Lattice1.
One thing that sets GridPlus apart is the combination of its two products. Usually, with a hardware wallet, you will have to copy your seed phrase to somewhere else, preferably offline. Usually, what’s advised is that you use a piece of paper. However, a piece of paper is not durable – it can get wet or the ink will wear off.
Gridplus’s SafeCards take care of that. They are like the typical credit or debit card that saves your secret phrase, and you can insert it in a Lattice1 device when you need to restore your account.
The product is pretty new compared to its counterparts, so it’s not surprising that they currently do not support a lot of coins. However, it supports several apps, including Metamask, mStable, Curve, and its own web wallet.
If you want a larger and sleeker hardware wallet, go for the Lattice1. It’s built to look like a tab or iPad with a large touch screen, so you don’t have to deal with waiting to read transaction details on your wallet. Also, it has wireless connectivity.
The Lattice1 integrates well with its SafeCards which you can use to back up your seed phrase in its pin protected system. You can purchase as many safe cards as you like and use each for different accounts if you wish for added security.
Unlike Trezor and Ledger products, the Lattice1 isn’t portable. However, they claim you don’t need to carry it around because you can integrate it with your phone and restrict that integration from carrying out certain payments or have daily/monthly limits. But that brings the question of security into play which is the whole reason for a hardware wallet.
If you want a hardware wallet for the sake of a hardware wallet and nothing else, this might not be for you. Nevertheless, the Lattice1 has a market. If you have struggled with the tiny screen of your wallet or your paper backup or want some extra security features, go for Lattice1.
Lattice1 is also the most expensive on our list. It’s $349. If you want the SafeCard, that’s at a separate cost of $40 for two SafeCards (minimum order). Click here to purchase the Lattice1.
Best Practices when using a Hardware Wallet
- Keep your seed phrase safe: without it, you can’t restore your account if you lose your keys or device, and that means losing your money.
- Choose a pin that is hard to guess
- Always check before confirming transitions, so you don’t fall for tricks from malicious actors
- Make sure the source of addresses you send crypto to are legitimate
- Trust only what you see on the wallet’s screen
- Although some hardware wallets aren’t affected if your computer is compromised, always treat computers and mobile devices with caution
- Don’t talk about your crypto holdings in public or with people you don’t trust to avoid burglars stealing your hardware wallet.
Hardware wallets are a must-have if you want to go the long haul with crypto investments, especially when you’re looking to hold a lot of cryptos. They are the best and safest cold storage you can get; they are like your bank’s vault and insurance all in one.
Keep your hardware wallet in the safest place possible. That could be a safe in your fireproof house or something close to that.
That’s it for this article. I hope you enjoyed it. If you have any questions, reach out to me in the comments, and I will respond ASAP. Also, don’t forget to subscribe to our blog using the form below.