WHY DO I NEED A HARDWARE WALLET & ITS BENEFITS OVER THE OTHER DESKTOP, MOBILE OR WEB WALLETS
I’m sure by the time you get to this point in the crypto space, then you are likely to be in one of the following situation:
- You are a serious and long term cryptocurrency investor
- You have been hacked by someone
- You have the mindset of safe guarding your cryptocurrency from hackers or at least you can sleep well at night
- You just want to try one and see what it is like and how is it different from the other type of wallets out there
- All of above or none of the above.
So let’s start why you need a hardware wallet and how it’s different. You need a hardware wallet because it acts like your bank, you are in full control of your money, and your private keys are securely stored in the wallet only, can’t be extracted or exported even if you wanted to. The fundamental difference between a crypto hardware wallet and the other is how its private keys are stored and used at the time of transaction. As we all know if the private key is stolen, then your coins are gone. With hardware wallet, your private key always stays inside the IC or Integrated Circuit. The private key never leaves the IC so nobody including the wallet owner can’t even export the keys out or know what it is.
These wallets are designed to keep the private keys safe inside the wallet even if it’s connected to a virus infected computer. This is why it’s extremely safe from hackers. Every use of your wallet on the internet is securely isolated from any potential attacks. Only the person in possession of the wallet can sign for transactions or send crypto tokens by pressing a button to confirm that transaction, not a click of a mouse on a web wallet or mobile wallet.
Hackers are too crazy and they are always ahead of the game, so only hardware wallets have a known history of no successful attacks yet by any hackers.
HARDWARE WALLET TYPES, BRANDS, EASE OF USE & SETUP
Generally speaking, all the hardware wallet serves two purposes that is to provide extreme level of security for storing crytocurrencies as well as signing transactions. I like to categorize them into two types; wallets with displays and wallets without displays.
Currently bitcoin.org certified brands are only four of them as follows: Trezor, Ledger, Keepkey and digitalbitbox. They are made in Czech Republic, France, USA, and Switzerland respectively. All of them use open source protocol, mostly BIP 39 & 44 PATH. There is a detail comparison for each wallet below that I gathered.
Something interesting to mention about digitalbibox, they are the only one so far that offers a TF or microSD card slot that is being used to do your master seeds backup. It also supports the FIDO or U2F like the most of the other hardware wallets, see details below.
SPECIAL TIPS TO ALL HARDWARE WALLET USERS
Always carefully write down your master seeds, normally 12, 18, or 24 English words, write them down on a piece of paper, never take photos of them, or put save them on computers. Keep multiple copies in different places. Let your loved/trusted significant other know about it if you like. Check them once every few months just to keep your memory fresh. Remember: The master seeds are your last line of defense should your wallet is lost, damaged, stolen. Without those master words, you will lose your bicoins or other tokens for good. Nobody on this planet can help you. Your wallet is your bank. Store your fortune on hardware wallets, and keep small amount in your mobile wallet for convenient uses.
Before you make large amount transfers, carefully check the addresses you are sending, be sure it’s copied correctly, you can alway send a small amount first to test. Always keep your hardware wallet up to date with the latest firmware. This is very important.
The most popular and best Bitcoin/altcoin hardware wallet:
Ledger Blue is the most advanced hardware security gear on the market. It boasts multi application execution, and packs enterprise-level crypto-capabilities into a lightweight handheld device designed and crafted in France. It is architected around a Secure Element, featuring a touchscreen and USB & Bluetooth* connectivity.
The Ledger Blue is the latest generation product from Ledger, result of more than two years of research and development. This high-end device embeds a large touchscreen to securely manage transactions and complex smart contracts. Its slick yet robust casing encloses the best-in-class technology built upon the Blockchain Open Ledger (BOLOS) platform, a powerful and flexible operating system.
The Ledger Blue is based on a dual-chip architecture embedding a ST31 Secure Element and a STM32 microcontroller thus achieving a fully isolated environment. It features a LED-backlit color touchscreen to navigate easily and validate transactions. It is powered by a lipo rechargeable battery and communicates with USB or Bluetooth* devices.
Thanks to its modular architecture, the Ledger Blue runs multiple dedicated companion apps in full isolation on top of its firmware. The strong security model allows to add new cryptocurrencies or apps without risk of compromising the master seed. Transaction integrity is ensured by the WYSIWYS paradigm (What You See Is What You Sign). The flexibility of the device enables enterprise level usage: with all major crypto libraries embedded in the firmware, any type of blockchain can be supported.
Price: 274.80 €
The Ledger Nano S is a product of a France-based startup. It has sleek and attractive European touch to its design.
Some of its core features are the backup seed key for recovery of your bitcoins, the easy to use OLED interface, and a flash drive like feel with two buttons on the side for navigating the interface.
It is a battery-less device which you can connect to a PC or mobile device via USB.
The Ledger Nano S is the cheapest of the three hardware wallets with a screen.
Ledger can store bitcoin, ethereum, ripple, zcash, dash, dogecoin, litecoin, Stratis, REP, GNT, 1ST, SNGLS, and any Ethereum ERC20 token.
Ledger can also be used for FIDO® U2F, GPG, SSH or build your own applications.
Ledger, one of the most well-known Bitcoin security companies, released the device in August 2016.
KeepKey was released in September 2015 and was the second hardware Bitcoin wallet to offer a screen. The KeepKey’s larger screen gives it some extra security features that the Nano S and Trezor lack. It doesn’t offer much in comparison to the Ledger Nano S or Trezor. Moreover, it is more than two times in size than its peers, and not so convenient to carry in your pocket.
It has same backup seed key feature with pin code enabled, and it works like the other wallets. At present, it supports six cryptocurrencies (including Bitcoins).
Price: Currently unavailable.
The Trezor Bitcoin hardware wallet pioneered the era of hardware wallets. Trezor launched in August 2014 as the first Bitcoin hardware wallet, offering secure bitcoin storage plus the ability to spend with the convenience of a hot wallet.
TREZOR is a small, thumb-sized device with screen. It looks like a small calculator with an OLED screen. Randomly generated nine digit pins and a 24-word recovery seed key ensures security in case the device is lost or damaged. Its purpose is to store private keys and sign transactions offline.
The number of TREZOR-compatible services is growing rapidly and here’s the nearly complete list.
Currently Trezor offers a very useful feature called password manager, this is a great feature that is not just for cryptocurrencies. It can be used for all of your password management. This is something that we can all use on a daily basis.
Digital Bitbox is a minimalist bitcoin and ethereum hardware wallet packed withsecurity and privacy. Safely hold and spend your coins with peace of mind. Store and secure bitcoin, ether, and ERC20 ethereum tokens.
The Digital Bitbox is a FIDO Universal 2nd Factor (U2F) compatible authenticator.
There is new TREZOR 2 model coming in august 2017! Proto in pictures.