In this guide of ours, we list you some of the best cryptocurrency hardware wallets of 2018. We also talk about other wallets and explain you briefly which one you need and why you need to have one.
Things the article will cover:
- What’s a Crypto wallet?
- Disadvantages of using hot wallets compared to cold wallets
- What makes hardware wallets so secure?
- 3 Premium hardware wallets.
- Disadvantages of using a hardware wallet.
What’s a Crypto wallet?
Cryptocurrencies wallet store all your digital currencies. To be more specific, they store private and public keys that are to be used in sending and receiving cryptocurrencies.
A Cryptocurrency wallet is a software that allows the users to send and receive cryptocurrencies. At a time, wallets can hold multiple tokens and coins. Nonetheless, wallets only provide support to a limited number of cryptocurrencies.
A cryptocurrency wallet stores multiple and private key pairs. In order to spend your money, the keys need to be matched with a public key.
There are over fifteen hundred cryptocurrencies in the world; cryptocurrencies are not the wallets. When it comes to bitcoin and the other altcoins, the cryptocurrencies are stored decentrally and managed in a ledger that is available to the public on the network.
A private key is attached to every piece of cryptocurrency; providing a digital signature of transactions and inserting it in the public ledger, thereby spending it in the related cryptocurrency.
Wallets exist in different forms which allow users to store and access their digital currencies in different ways. However, the question that remains to haunt the cryptocurrency users is that of the security of these wallets.
Types of Wallets:
Desktop Wallets are to be downloaded and installed on PCs and Laptops. The desktop wallets are considered to be secure unless your computer has never been connected to the internet. In case, the wallet is connected to the internet it becomes a cold wallet.
And if the computer is ever hacked or infected by a virus, the chances are that you may lose your entire money.
Paper Wallets are user-friendly wallets that ensure high-level of security. To use this, you first need to print your public and private keys. This can be used to send and receive funds to a wallet’s public address and can withdraw or send money by entering private keys or by scanning QR code displayed on the paper wallet.
Unlike the other wallets, the mobile wallets run on smartphones via applications. These wallets work similarly to Apple Pay; you can use these wallets for shopping in stores and malls that accept cryptocurrencies as payment systems.
Online Wallets are the least secured wallets in comparison with the types of wallets listed above. Also called as ‘web wallet’, these wallets can be accessed from any device and any location.
The significant advantage of storing keys on an online wallet is that it can be used to store a smaller amount of cryptocurrencies. As long as you are connected to the internet, you make cryptocurrency payments. The private keys are stored on the online wallet provider’s server. The providers store your keys and give you the access to keys by sending you the crypto code.
Some third parties have control over the keys; making the wallet vulnerable to theft and hacking.
Hardware Wallets are probably the safest types of cryptocurrency wallets that are available to the users. The Hardware wallets stores user keys on hardware devices and are stored offline. Thereby adding an extra layer of security to users funds.
Disadvantages of using hot wallets compared to cold wallets
Before we move on to list some of the best cryptocurrency wallets, we share with you some of the disadvantages that a hot wallet possesses in comparison with the cold wallets.
The simplest way to describe hot and cold wallets is by saying the hot wallets are connected while the cold wallets are not. Often people store currencies on both the wallets as they are designated for different purposes.
So what are Hot wallets?
Hot wallets are cryptocurrency wallets that are connected to the internet. Ideally, hot wallets are more comfortable to set up, access and acknowledge more tokens. The wallets are often referred to storing your bitcoins and other cryptocurrencies in an exchange where currencies can be withdrawn instantly.
It involves a significant amount of risk when holding currencies in a hot wallet, as most of the devices are vulnerable to hackers or malware that enter into systems and steal funds. Thereby it is recommended that you don’t store a large number of currencies in a wallet that has low standards concerning security.
Cold Wallets are cryptocurrency wallets that aren’t connected to the internet. The wallets are more secure, but they don’t support or store as many cryptocurrencies as hot wallets. Since the wallets are not connected to the internet, the wallet is protected from vulnerabilities like unauthorized access and cyber attacks, whereas a system connected to the internet is prone to attacks like these.
Cold wallets are also referred to as Hardware Wallets, allowing to store keys on devices like USB( Ledger, Trezor, etc.) Often wallets are categorized into two platforms: an offline wallet containing private keys and another platform for holding the public keys.
Why you should go for a Cold Wallet instead of a Hot Wallet?
Hot Wallet providers store your keys on their servers, this makes your funds more vulnerable to technical glitches, regulations, and more specifically hackers. Whereas cold wallets are more secure because the keys are stored offline on USB devices.
To access the data, the hardware or physical wallets need to be plugged into a computer or a laptop. There is an added layer of security to the cold wallets as no one other than the owner can have access to the information associated with their crypto funds.
However, cold wallets are not free and cost about 80-90$ and do justice to their cost, in comparison with the hot wallets, which are free for the services they have to offer. If you are someone who is excited and interested in cryptocurrency investments, cold wallets are the safest wallets to go with.
3 Premium hardware wallets.
Currently, Ledger Nano S is the most popular hot wallet among the crypto-users. The product is from a France based startup. Ledger has a sleek and aesthetically pleasing design to it.
The functioning of the wallet is quite remarkable. The keys that provide you access to your coins are never disclosed. Nano S is secured with a chip and PIN code, and these are the same chip and codes that are used in passports and credit cards.
The wallet comprises two buttons on the side allowing actions to be verified straight on its screen. In case if your computer is ever infected with malware, the coins cannot be moved without your permission.
If your wallet is ever stolen, you can still gain access to your funds by using the backup phrase which allows you to recover access to the contents within your wallet.
BOLOS, a unique operating system created by Ledger, build a layer or shield around each of your application stored on the device. BOLOS doesn’t allow other users to access your sensitive information.
The Ledger Nano S wallet offers support to more than 30 cryptocurrencies, we’ve listed some of them below:
- BTC, BCH, BTG, ETH, ETC, LTC, DOGE, ZEC, XRP, DASH, STRAT, KMD, ARK, EXP, UBQ, VTC, VIA, NEO, XST, XLM, HSR, DGB, QTUM, PIVX, POSW, EOS, TRX, PPC, BTCP, ZEN, XZC, POA, RSK, kUSD, VET, ICX, PART, ONT, WAN.
Ledger Nano S offers multi-currency support with each of the keys with their own private keys. Ledger Nano S is the cheapest cryptocurrency hardware wallets, costing around 90 USD.
How to use Ledger wallet?
Irrespective of the operating system you use, Ledger can be used on any of the computer devices. The wallet also works fine with Mac, Windows and Linux. Once you are connected with a device, you will now have to download the Google Chrome Ledger application, where you can manage your device.
The two buttons on the device can be used in navigating its menus; buttons can be worked to navigate up or down. To confirm or proceed to the next menu, you need to click both the buttons at the same time.
The Ledger Nano S wallet is the best you can get for something which is under the $100 mark.
Along with Ledger Wallet, Trezor is the oldest names in the business of cryptocurrency wallets. Satoshi Labs create the wallet, Trezor is the world’s first secure Bitcoin hardware wallet.
The wallet looks like a mini calculator infused with an OLED screen. The wallet ensures security generating random nine-digit pins and a 24-word recovery seed key. The wallet offers a combination of safe offline along with the capability to spend tokens, similar to the hot wallets.
Trezor Wallet can be accessed with Android applications with apps such as the TREZOR Wallet, Mycelium, and Multibit HD. Trezor has an intuitive interface and is accessible either via Google Chrome or a program called Trezor Bridge.
Trezor secures your keys with unique PIN codes. During the installation process, the device will ask for a PIN code. In the event of a computer attacked by malware, the PIN may never get in contact with the hacker. The private keys on the device are stored in such a way that the keys will never be able to the device.
Trezor has an added security with the two-way factor authentication. The wallet generates a One Time Password(OTP) that change in every 20 seconds or every time you require the device for access.
How to use Trezor?
Upon initializing a transaction, a template is sent to Trezor that requests for a digital signature. The screen then displays the amount that is asked and the address where the amount has to be sent. If willing to proceed, you can click on the right buttons to carry forward with the transaction.
Trezor wallet supports Windows 7 to 10, iOS 10.8 and over and Linux as well. The Trezor Wallet will cost you 99 USD, which is slightly pricier than Ledger; both wallets offering the same functions.
Here is the list of cryptocurrencies that Trezor supports:
- BTC, BCH, BTG, LTC, DASH, DOGE, ETC, ETH, ERC20, NEM, NMC, ZEC, EXP, UBQ
Keepkey was launched in the year 2015 with a cue from some of the advanced technologies, providing the most secure platforms to store your cryptocurrencies. KeepKey packs a small size with a clear screen, making you navigate its menus easily. The OLED display on the wallets is easy to work on the device.
How safe is KeepKey?
Several users claim KeepKey to be the most secure hardware wallets that are available in the market. The private key data will be completely safe; the keys will remain safe on the wallet and will never leave the device. The wallet carries a PIN to access the transaction details; ensuring that no unauthorized user can’t view your transactions or your balance.
KeepKey wallet is backed up by a 12-word recovery phrase, but 18-24 word passphrase can also be used. The longer the passphrase, more the wallet is secure. In order to recover the information or keys that are stolen, passphrases can be used.
Cryptocurrencies supported by KeepKey.
- BTC, BCH, DASH, DOGE, ETH, LTC, NMC
The amount of cryptocurrencies KeepKey supports is relatively lower in comparison with its competitors. The KeepKey wallet can be purchased for 99USD.
Also read, Best Cryptocurrency Wallets of 2018
Disadvantages of using a hardware wallet
Hardware wallets are relatively new, but for now, they are maintaining a good track record when compared to the wallets that are connected to the internet. However, it is essential to understand that hardware wallets are the target of high value, there are ways that in which a hardware wallet can fail to protect your cryptocurrencies. The number of risks has to be carefully considered when throwing trust in a single wallet and which one to buy.
- Cold wallets aren’t free. The prices of a few wallets are slightly expensive, and some exceed more than $50.
- These wallets are not ideal for quick and regular transactions.
- Most hardware wallets don’t provide support to all the cryptocurrencies.
- If you forget the seed keys or PIN, you may not be able to access your coins.
Most of the cryptocurrency users leave their coins on an online exchange platform. Although storing currencies on these platforms are convenient, however, cryptocurrencies are not secure.
Cryptocurrencies can be stolen and are vulnerable to attacks; this is why you need to go with hardware wallets to store all your coins.
We suggest you use either Ledger Nano S or Trezor, as they provide brilliant security and also how intuitive their user interface is. We also recommend you to purchase these hardware wallets from an authorized and reputable seller.