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Hardware wallets are one of the most convenient and safest options out there for storing your cryptocurrency.

A hardware wallet is a type of cryptocurrency wallet where you can store your private keys in a secure physical device. The cryptocurrencies stored in the wallet are kept offline, meaning that they can’t be hacked. However, when needed, the coins stored are readily available. If you are not that well-versed in coding and technical details, the hardware wallet is a great way to store the majority of your cryptos.

Before we go any further let’s take a more in-depth look into the different types of cryptocurrency wallets.

What are cryptocurrency wallets?

When we hear the word “wallet,” we often think of a pouch wherein we can store physical money. Cryptocurrencies don’t have a digital form and the way we control the flow of these coins is via our private keys and public addresses.

In a standard wallet, we can perform two functions:

Put the money inside the wallet to store it.

Take the money out of it to give it to someone else.

In cryptocurrencies:

Your public address is where people can send you your crypto.

You can unlock your crypto and use it any way you want with your private key.

A cryptocurrency wallet is a program or a device that stores your public address and private key. It can also be used to receive and spend your crypto. The wallets can be broadly divided into the following categories:

Hot wallets.

Cold wallets.

Hot Wallets

These are crypto wallets that are actively connected to the internet. While it is easy to transact using these wallets, they are vulnerable to hacks. Exchange wallets, mobile wallets, and desktop wallets are examples of hot wallets.

Cold Wallets

Cold wallets are crypto wallets that are not connected to the internet and hence safe from hack attempts. Paper wallets are an example of cold wallets. The idea is that if you want to store away and hold on to your cryptocurrencies safely, then you can use a cold wallet to keep them safe.

Hardware wallets combine the safety of cold wallets, along with the ease of transactions of hot wallets.

Bitcoin hardware wallet details

Hardware wallets are physical devices, which act as a flash drive and store your private keys. The device is secure enough that you can even use them with a device you don’t trust. The best things about using hardware wallets are:

You will keep the wallet disconnected in your pocket or bag at all times. This makes sure that the wallet is off the net and cold.

Whenever you need to send your crypto, you simply connect the wallet to a computer or a device, enter your PIN-code and send the funds. The moment the transaction is completed, you disconnect it and keep it in a safe place.

How hardware wallets secure your private keys?

The most important thing that you must remember is that the private key never leaves the hardware wallet. The entire transaction validation process is done within the hardware wallet itself and not on the computer. Traditional offline wallet clients only use the private keys from your regular hard drive or device storage. Unfortunately, what this means is that they are easily available and vulnerable to attacks. You can always store the private keys in an encrypted hard drive, but to use that you will need to decrypt it, which will instantly make your keys vulnerable.

Hardware wallets, on the other hand, don’t expose the private keys even during transactions. Here’s a brief description of how it works:

The hardware wallet will ask the wallet software running on your computer or smartphone to provide the payment details like the requested amount and target address.

The moment the hardware wallet receives those details, they will await user confirmation, sign the transaction, and then eventually send back a digital signature to the software. This will complete the transaction.

Hardware Wallet Disclaimer

The graph below shows you a breakdown of the biggest perceived threats for crypto:

Credits: Trezor Blog

With a whopping 66.30%, remote attacks take the cake when it comes to the biggest perceived attacks in crypto. The primary purpose of a hardware wallet has always been to protect users and funds against malware attacks, computer viruses, and various other remote dangers.

Having said that, hardware wallets are not 100% safe. As with any other wallets, they are still susceptible to the “$5 wrench attack.” If you are unaware of this attack, then check out this fun little comic by XKCD.

Along with this, if you have an attacker targetting you with huge amounts of capital, time, and resources, it will be impossible to protect you from them. However, let’s assume that for the sake of this article that you don’t have a megalomaniac arch-enemy targetting you.

So, these two obvious vulnerabilities aside, your hardware wallet can also suffer from another possible weakness. There’s always a possibility that it may have been constructed inaccurately or the hardware manufacturing and shipping may have been compromised. This is why it is very important that you only buy your hardware wallet from trusted and credible manufacturers.

In this article, we are going to give you a rundown of some of the best and the most trusted hardware wallets out there.

Best Hardware Wallets: Ledger

The Paris-based Ledger is one of the most respected and credible companies in the hardware wallet space. They leverage their proprietary technology to develop security and infrastructure solutions. They have a production facility in Vierzon (France) and offices in San Francisco. The firm launched in 2014 and their wallets have sold 1,000,000 units in more than 165 countries.

At the heart of their innovation lies a distinct operating system called BOLOS, which they either integrate to a secure chip for their wallets, or a Hardware Security Module (HSM) for various enterprise solutions.

The company also plans to launch the Ledger Vault, a security solution for banks, hedge funds and family offices that want to invest in cryptocurrencies. Speaking about the Vault, co-founder and CEO Eric Larchevêque stated:

“For the wallets, we integrated our operating system in a secure chip, and for the Vault, we are integrating it in a hardware security module. The idea behind it is to provide additional features and services, such as multi-accounts, multisignature or timelocks.”

Now that you have some idea about Ledger, let’s take a look at their two flagship wallets – Ledger Nano S and Ledger Nano X.

Best Hardware Wallets: Ledger Nano S

Ledger Nano S is a widely-used hardware wallet developed by the French company ledger. It is a compact USB device based on a smart card. It is roughly the size of a small flash drive, measuring 39 x 13 x 4mm (1.53 x 0.51 x 0.16in) and weighing in at just 5.9g.

Ledger Nano S Package

Ledger Nano S comes in a neat little package which contains the following:

Ledger Nano S

1 micro-USB cable

Lanyard for wearing the device around the neck

One keychain and a keyring

Recovery sheet for writing down the seed keyword.

Activating Ledger Nano S

To activate the Nano S, you need to connect it to the computer via the USB cable. When you choose the option to create a new wallet, you will need to confirm the PIN code. You must remember the PIN code because you will need it each time you want to access your Nano S.

When you had opened the package, you’d find a piece of paper that looks like this:

These 24 words will be your private key. You will need to write down your words in the same order that they are given to you. In case you ever forget your pin, to recover your wallet, you’ll be asked questions like:

“Enter the 17th word in your recovery sheet.”

Ledger Nano S Supported Coins

As per Ledger’s website, the Nano S natively supports 1184 coins. These include most of the major coins like:

Ledger Nano S Pros and Cons

Pros

The setup is pretty simple and straightforward.

Ledger Nano S is capable of running third-party apps and currently, as per the site, there are 18 installable apps.

Ledger Nano S supports a vast variety of coins.

Integrates with a large number of software wallets.

It is a very affordable hardware wallet ($59), giving a very high-value proposition.

T he entire recovery process can be done from the device only without even connecting it to a computer.

Features Ledgers secure chip technology.

Pretty inconspicuous looking since it resembles a simple pen-drive. Plus, it is pretty lightweight, so can be easily carried around.

Cons

Not an open-source hardware.

The recovery sheet can be stolen or replicated if enough care isn’t taken.

Best Hardware Wallets: Ledger Nano X

Nano X has a legitimate claim of being the best hardware wallet in the market right now. It looks really good and is very secure. Currently, it is priced at $119. Nano X has superior security thanks to the use of two chips. It also has a Bluetooth feature that will allow users to use the Nano X with their phone, or laptop, without the need of a wire.

The most significant difference between Nano X and Nano S is that the former can hold multiple cryptocurrencies at once. In the Nano S, the users had to manually install and remove the apps to use a particular wallet. However, users can install multiple crypto wallets in Nano X at the same time.

Ledger Nano X Features

Size: 72mm x 18.6mm x 11.75mm Weight: 34g.

Constructed from stainless steel and plastic.

Powered by the 100mAh battery.

Stores multiple cryptocurrencies at the same time.

Allows login to DEX like Binance.

Ledger Nano X package

The package contains the following:

Ledger Nano X

1 USB C cable

Keychain for device

3 recovery sheets

Ledger stickers

Supported Coins

Ledger Nano X supports the same coins as Nano S. Some of the main ones available are:

Bitcoin

Bitcoin Cash

Ethereum

Litecoin

Monero

Ripple

Neo

Binance Coin

ERC20 Tokens

While the setup is mostly similar to Nano S, we must look at the unique feature of the wallet, how to add coins to your device.

Adding coins to your device

Each time you want to add new coins on your Ledger, you need to install its respective app. So, if you want to add Bitcoin, then you must add the Bitcoin app on your Nano X:

After you have installed the app, you need to open it:

Once you open your Nano X, you will get a confirmation that the app has been added.

Upon opening the app, you will get to see your Bitcoin balance and also have the option of sending and receiving BTC.

Along with that, you will also get the option of using a QR Code to send and receive Bitcoins.

Pros and Cons of Ledger Nano X

The setup is pretty simple and straightforward.

Ledger Nano S supports a vast variety of coins.

It has Bluetooth functionality, making it easier to use on the go.

T he entire recovery process can be done from the device only without even connecting it to a computer.

Features Ledgers secure chip technology.

Pretty inconspicuous looking since it resembles a simple pen-drive. Plus, it is pretty lightweight, so can be easily carried around.

Allows multiple apps and coins to function at the same time on the wallet.

Cons

Not open-source hardware.

The recovery sheet can be stolen or replicated if enough care isn’t taken.

The UI could be a little difficult to understand for newcomers.

Best Hardware Wallets: Trezor

Trezor was the first legitimate and secure Bitcoin hardware wallet. The wallet was built by SatoshiLabs and was truly pioneering, in every sense of the word. It is not as inconspicuous looking as Ledger since it looks like a small calculator with an OLED screen. You can use the Trezor wallet with Android devices and with apps such as Trezor Wallet, Mycelium, and Multibit HD. Trezor builds an isolated environment for offline transaction signing. Trezor minimizes the risk of private key discovery, even if the PC is infected by malware.

Every single Trezor wallet has a PIN code that never leaves your wallet. This simple feature makes sure that even if the computer that the wallet is using is compromised, your PIN will not get stolen. The PIN system in Trezor also has an inbuilt system that prevents any brute-force attempts. After each incorrect guess, the waiting time between the guesses is raised by a power of two. Making 30 guesses will take as much 17 years.

The entire wallet is backed up with the 24 words generated on setup. The original 24-word seed is generated using RNG (Random Number Generator) from the device and the computer. The seed is generated offline and displayed on the wallet’s screen, which ensures that the seed is never on an internet-connected device. If you ever lose your Trezor wallet, then you can simply recover it with the 24-word seed and passphrase.

Best Hardware Wallets: Trezor One

Trezor One is one of the most popular hardware wallets out there. Let’s take a closer look at how you can work with them.

Working with Trezor

So, after connecting with your chosen interface, you will notice this in your laptop:

You will have to enter the PIN which will be randomly generated by your wallet every single time and will be displayed on the screen of your wallet like this:

The number will randomly generate for every single transaction. This gives an added layer of security to your cryptocurrency. In case, you have some keylogger in your computer recording your activities for malicious purposes they won’t be able to get access to your wallet because the pin will keep changing.

After you have put in your PIN, you will have to put your passphrase which is known to you and only you. When you are done, you will gain complete access to your wallet and you can send/receive funds as and when you please. If you are sending someone money, your Trezor will ask for your confirmation by showing this message on its screen:

You can cancel or deny the transaction.

Trezor One Supported Coins

As per Trezor’s website, they support 1064coins. These include the following:

Bitcoin

Ethereum

Ripple (only Model T)

Bitcoin Cash

Litecoin

Tether

Stellar

Dash

Ethereum Classic

Trezor One Pros and Cons

Pros:

Extremely simple to use.

Very sleek design.

It can be used on all devices provided the platforms are compatible (Windows, Mac OS X or Linux).

Never exposes your private key.

Randomly generated pin code keeps the device safe and secure.

Cons:

Costs $75 which is a bit steep.

Trezor One doesn’t support Ripple (XRP), Cardano (ADA), Monero (XMR), and Tezos (XTZ)

Not as inconspicuous-looking as Ledger Nano.

Best Hardware Wallets: Trezor T

Trezor T is an improved version of Trezor One with a better screen. The wallet also lacks any buttons and is completely touchscreen.

What’s in the box?

The Trezor T box includes the following components:

Trezor Model T device with a holographic seal over the connector

Type C USB cable

Getting started card

Magnetic dock

Recovery seed card.

Stickers.

How to setup Trezor T?

Trezor T will work with the up to date versions of both Chrome and Firefox. To set up your device, do the following:

Connect the Trezor wallet to your computer or smartphone.

Open trezor.io/start to begin the execution process.

Choose the Model-T option and follow the on-screen prompts.

The wallet will now ask if you are setting up a new device or want to recover a pre-existing wallet.

To backup, your wallet, click “create a backup in 3 mins” in the GUI and write down the randomly generated 12-word recovery seed on the papers given to you.

To confirm, the wallet will ask you to re-input two random words from the seed sheet. You must make sure that the device doesn’t get powered down during the process. If you do, then you will need to start over.



Note: You must keep your seed sheet as secure as possible. Your device is only as safe as your recovery seed. If they fall in the wrong hands, then they will be able to import your wallet and steal your funds.

After you have recorded your recovery seed, you need to out your 5-9 digit PIB code. You will need to put in the PIN twice before completion.

Trezor T Supported Coins

It supports all the coins that Trezor One supports, along with Ripple, Cardano, Monero, and Tezos.

Trezor T Pros and Cons

Pros:

Extremely simple to use.

Very sleek design.

It can be used on all devices provided the platforms are compatible (Windows, Mac OS X or Linux).

Never exposes your private key.

Randomly generated pin code keeps the device safe and secure.

Has more coins available than Trezor One.

It has a touchscreen instead of buttons.

Cons:

Costs $159 which makes it more expensive than its peers.

Not as inconspicuous-looking as Ledger Nano.

Best Hardware Wallets: KeepKey

KeepKey was founded in 2015 by Darin Stanchfield and is headquartered in the US. In 2016, they acquired the Bitcoin wallet Multibit. Later in August 2017, the wallet was acquired by Shapeshift, the Switzerland-based exchange founded by Erik Voorhees. Stanchfield heads the company as the CEO and Ken Hodler as the CTO. KeepKey is one of the most well-built wallets out there and is priced at $99.

KeepKey: Getting Started

You will need to go to the “Getting Started” page where you can start the initialization process:

Download and install the KeepKey Chrome App.

Insert the KeepKey hardware wallet into your PC.

Initialize the KeepKey Google Chrome app.

When the extension is installed, you will be redirected to the chrome://apps/. If not, then manually open that in Chrome and pick the KeepKey client.

If the KeepKey is not running in the latest firmware version, then you will be prompted to upgrade it, via a warning.

You will now have to unplug your device and upon replugging it, you will need to hold down the button on top.

While holding the button insert your KeepKey into the USB which will activate the firmware upgrade mode.

Once the firmware is upgraded, you will get your hands on the private key.

The private key seed will be displayed only once and you need to keep it a secret.

Up next, you will need to make your PIN. The longer the PIN, the better the protection.

After PIN confirmation, KeepKey will show 12 randomly generated words which will be your “recovery sentence.” KeepKey will now show these words again, so you must be super careful while writing these down.

KeepKey uses a technique called “Recovery Cipher,” which scrambles and shuffles the letters of your word. This makes sure that the wallet remains safe, even if the computer is infected with malware.

KeepKey Supported Coins

KeepKey natively supports the sending and receiving of the following coins:

Bitcoin

Bitcoin Cash

Bitcoin Gold

DASH

Dogecoin

Ethereum

Litecoin

KeepKey also provides support to ERC-20 tokens.

KeepKey: What’s in the box?

When you open the package, this is what you’ll get:

KeepKeey hardware wallet

USB cable.

Cardboard recovery sentence card

Warranty compliance leaflet

The wallet itself is pretty huge yet elegant looking. It has dimensions of 38 x 93.5 x 12.2 mm. At the front, it has a large 256×64 3.12″ OLED screen which is protected by a polycarbonate casing. On the back, the wallet is built out of aluminum.

The wallet has a single button on top, which is used for confirming or canceling transactions. While it can be powered by a power bank or a charger, it needs to be connected to the KeepKey Chrome App to operate.

Pros and Cons of KeepKey

Pros

Large LCD makes user interaction simple.

Integrated with ShapeShift.

Built to withstand wear and tear.

Design is very user-friendly

Top-notch security.

The recovery cipher keeps the wallet secure.

Cons

The recovery seed is shown only once.

The wallet size is huge, which means that it is not easily accessible.

There is no Lock feature, so if you forget your device unlocked and plugged in, anyone can access it, even without using your PIN.

Development is slower compared to Ledger and Trezor.

Customer service leaves a lot to be desired, as per user reviews.

Conclusion: Best Hardware Wallet

Let’s conclude this guide by doing an overview of the wallets.