When it comes to the safety of crypto funds, there is no better solution than a hardware wallet.

Cryptocurrency is a digital currency without the physical object and cannot be saved under your mattress. Cryptocurrency is stored on a cryptocurrency address and the address is stored in a wallet.

Rather than coins itself, a cryptocurrency wallet is an application, a piece of software, that stores your unique private key, the tool that allows you to prove ownership over the coins. Securing your digital assets is storing the private key safely and the most important function of a wallet.

When you use a cryptocurrency wallet, you are using cryptocurrency addresses that the wallet generates. The coins are stored at these addresses.

Every cryptocurrency address has a public and a private key. The distinction between the two is that the transaction is encrypted with the public key, which is derived from the private key. The private key represents the ability to access coins belonging to a specific cryptocurrency address. Put simply, the public key makes receiving cryptocurrency possible, while the private key proves the ownership of the coins for sending it.

Different types of wallets

There are different types of cryptocurrency wallets, a cold wallet, a hot wallet and a paper wallet and their main difference is the manner in which the private key is stored. A cold wallet is an external device that can be kept offline, e.g. Hardware wallet. Hot wallets are all desktop wallets, mobile wallets and web (online) wallets.

To HODL your funds safely, store it in a hardware wallet.

Hardware wallets for cryptocurrency are portable physical devices that encrypt all the data. User’s keys are generated within the wallet and protected with a password or seed phrase.

You could use a paper wallet or a USB flash drive or a computer that is never online to store cryptocurrency and are all legit methods if you are only hodling your assets. However, if you are a trader you want your assets to be available often and to still have a sufficient layer of security, a hardware wallet is essential.

Hardware wallets are ideal for storing a larger amount of cryptocurrency to use with a computer.

Read the description and comparison of the five most popular and secure hardware wallets: SatoshiLabs Trezor Model T, Ledger Nano, Shapeshift’s KeepKey, Shift Crypto Security BitBox02 and Coinkite’s Coldcard.

Trezor

The manufacturer is SatoshiLabs from the Czech Republic. The world’s first cryptocurrency wallet was Trezor Model One introduced in 2014 and its newer brother is called the Trezor Model T. The device is built from plastic and is small, solid and well-built with the appearance of a car key fob.

  • Supports 1,000+ cryptocurrencies
  • USB-C connector
  • Uses Trezor Bridge client software to facilitate communication between the hardware wallet and a computer (requires installation but runs in your browser)
  • Users can connect their Model Ts to the Electrum Web Server, Wasabi Wallet and Exodus
  • Has a multisig support
  • If you buy the latest model, it is the most expensive of the bunch, but you can safely opt for the competitively priced model One
  • You can get a protective case
  • It offers a great mix between accessibility, security and open-source code

Ledger

Ledger was introduced in 2014 and is from France. It has three models, Ledger Nano S, Ledger Nano X / Ledger Blue, but in this description, we will look at the Ledger Nano S. As it is designed to look like a USB flash drive, it is easy to hide the device’s true purpose. It is built from stainless steel and plastic.

  • Supports 1,100+ cryptocurrencies
  • USB-C and Bluetooth connectivity
  • Uses of a local application called Ledger Live (installed locally on your hard drive)
  • Has a multisig support
  • Cryptographically checks the integrity of the hardware with the embedded Secure Element chip

KeepKey

KeepKey is a product from parent company Shapeshift. Made from plastic and metal, it resembles an external hard drive and is one of the oldest in design.

  • Supports 40+ cryptocurrencies
  • USB connector
  • Has Client, a barebones desktop application that allows users to check, send and receive BTC, and to connect to the ShapeShift website. It also integrates rival manufacturers on the platform.
  • Has a multisig support
  • the best and easiest exchange integrations

BitBox02

The hardware wallet using open-source software and a USB micro card was built in Switzerland in 2015. Made from plastic, it looks like a USB flash drive.

  • Only supports Bitcoin and altcoin cryptocurrencies
  • Male USB-C connector
  • Uses BitBox app, similar to Ledger’s application, a basic interface allowing coin control (users choose from the amount they are sending) and a seamless pairing with a local full node.
  • No multisig support

Coldcard

Made from transparent plastic, it looks like a pocket calculator.

  • Supports Bitcoin only
  • Female USB-C connector
  • No dedicated software client. It operates via open-source, robust and local programs such as the Electrum Personal Server and Wasabi Wallet (more appropriate for power users)
  • Case hides a dedicated security chip which is labelled as “SHOOT THIS.”
  • Has a multisig support
  • Most security and privacy-oriented

Buy one directly from the manufacturer and follow the verification stages that each device has closely. For example, all of them have a mechanism that verifies the authenticity of the device, the seed phrase is checked at the first setup, and every time you plug the device in, it asks for a PIN number and a confirmation when sending the transaction. The most important part of having a hardware wallet is writing down the mnemonic (seed phrase) and setting up a backup.

Choosing any of them offers you a great level of security, but depending on your skills and needs, you might prefer one over the other. Regardless of the brand, the most important factor is security and the user interface that best fits your preferences.

In case you’re wondering how you can go one step further in securing your funds, you can get a metal seed storage device. There are a few on the market. We will only name the two: Billfodl and Cryptosteel. Both devices are made from stainless steel and come with prefabricated letters.

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Author: Tokens.net Team
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