Cryptocurrency Hardware Wallets
Cryptocurrency storage solutions have different types based on their features. Like a physical wallet for paper bills, cryptocurrencies – although digital – have a special kind of wallet too. A crypto wallet holds our public and private keys to store, send and receive cryptocurrencies like Bitcoin and ETH. As the overall cryptocurrency market cap continues to increase over time and cryptocurrency coins and tokens become more valuable, security becomes more of an issue when it comes to storage solutions.
To keep your digital currencies safe and secure, you need a reliable cryptocurrency wallet because it serves as your personal record of transactions using cryptocurrencies. A cryptocurrency hardware wallet is regarded as the safest way to store your cryptocurrencies. Unlike crypto wallets based on software, hackers have no way of getting into your hardware wallet because a hardware device is used to store the private keys of your cryptocurrencies.
When sending or receiving cryptocurrencies, you simply connect the hardware device to your computer with Internet access. Most hardware wallets have an accompanying app so you can send and receive cryptocurrencies.
Advantages of Hardware Wallets
The main advantage of using a hardware wallet for your cryptocurrency storage is it isolates your private keys from your mobile or computer. Devices connected to the internet are vulnerable to malware and hackers. It’s risky and there’s a chance that you’ll lose your precious cryptocurrencies if the private keys stored in your computer are compromised.
A hardware wallet is more secure but can be a bit more complicated versus software wallets. A cryptocurrency hardware wallet usually uses two-factor authentication to access your private keys. Unlike software-based crypto wallets, you will actually have something physical to store your cryptocurrencies in. Your hardwallet should have full encryption with a PIN as another layer of security. Even if hackers or robbers physically found their way to your crypto wallet, they will not be able to steal your private keys unless they also have your PIN.
Technically, a paper wallet may also be classified as a cold wallet since it is not based on software. It still has limited security since you will be required to input the private keys of your digital currencies onto your computer. Hackers can deploy malware and wait for you to input your passkey before getting all your money.
For users holding multiple cryptocurrencies, storing them in a hardware wallet makes a lot of sense. Setting up the hardware wallet is easy and simple enough since they were designed to prevent any error on the part of the user.
Disadvantages of Hardware Wallets
Hardware wallets depend on a Random Number Generator or RNG for security. The number is encrypted in the hardware to retrieve the private keys of your digital currencies. An unsecure RNG may generate hardware wallet keys that may be used by a hacker later for duplication.
Unlike software-based crypto wallets, hardware wallets don’t have the full features needed to transact with multiple cryptocurrencies. You cannot download the full blockchain of a certain cryptocurrency in a hardware wallet because its capacity is not enough to accommodate the storage of an entire blockchain.
Aside from limited storage, hardware wallets do not support all cryptocurrencies in the market. If you buy an unsupported cryptocurrency on the market, you often have to wait for developers of the hardware wallet to allow its storage.
Another disadvantage is if you lose or damage the device itself, you can no longer recover your private keys for your cryptocurrency. You need the actual hardware to send, receive and transact. This is one advantage that software wallets have over hardware wallets.
Current Hardware Wallets in the Market
The Trezor and Ledger Nano S are some of the commonly used hard wallets for cryptocurrencies. Manufacturers focus more on security aside from convenience. Both wallets can be connected into any online system without exposing the sensitive data of your cryptocurrencies.
Trezor is the pioneering cryptocurrency hardware wallet for cryptocurrencies as it was introduced in 2014. Even if your computer is compromised or vulnerable to attacks, your cryptocurrencies with Trezor remain safe. Every Trezor hardware wallet assigned to you contains a PIN code. In case your Trezor is lost or stolen, unauthorized users cannot steal your cryptocurrency.
The manufacturers of Trezor recommend not keeping your recovery key in cloud services like Dropbox and your email. Instead,the recovery card should be kept in a secure place and away from fire and water. This hardware wallet has full support for operating systems like Windows, OS X. Linux and Android. Browsers like Chrome and Firefox have major support for Trezor.
The Trezor wallet can store coins like Bitcoin, Litecoin, Ethereum & ERC20 tokens, Dash, Ethereum Classic, Zcash and many others. Trezor also has a variety of models available rangin from the older Trezor One.
Another popular crypto hardware wallet is the Ledger Nano S. It is used to secure cryptocurrencies like Bitcoin and Ethereum. It also supports other altcoins like Litecoin, Zcash and Dash. You can connect the Ledger Nano S to any computer via USB. It has an OLED display to check and verify every cryptocurrency transaction with just a press of the buttons on the side. The only way for any cryptocurrency transaction to go through is when you press the two buttons at the same time. Ledger has also other hardware wallet on offer like the Ledger Blue and ledger Cryptosteel for securing your backup phrase.
Keepkey is another crypto hardware wallet that works similar to Trezor and Ledger Nano S. You can backup your entire crypto wallet with the generated 12-word key. Measuring 3.7 x 1.5 inches in size, Keepkey is bigger than the more popular hardware wallets.
Bitlox Hardware Wallet
In addition to the more established hardware wallets. There are up and coming hardware wallets that look sleeker and are smaller. Bitlox supports Bitcoin and Ethereum, provides advanced security like quadruple PINs, TOR integration and even a hidden wallet feature that can prevent your crypto from getting stolen in the event of robbers getting physical with you. Also it’s less bulky than other hardwallets since it’s just 4 mm thick.
Hardware wallets are relatively new in the cryptocurrency space compared to other storage solutions. Since hardware wallets are secure, there are very few if any incidents of online hacking or stolen cryptocurrencies. The biggest threat really is when thieves get physical and actually target you offline to gain access to your crypto. This is why some crypto affluent people have resorted to keeping their hardware wallets in banks or other safe storage.
Hardware wallets may cost you more money than software wallets, but the high level of security will bring you peace of mind knowing your cryptocurrencies are safe.
The ico-check team hopes this article has given you an informative overview of the available hardware wallets to help you on your crypto journey.