Hardware Wallet for Bitcoin & Cryptocurrencies
Over the past couple of years, awareness over cryptocurrency has grown faster than before. Apart from that, with the incredible increase in its price, every day more users are now flooding into the market, purchasing Bitcoin in the hopes of making big profits as they are now realizing the potential of this new currency. This hardware wallet review is aimed at helping you secure your holdings.
Founded over a new technology called the blockchain, Bitcoin is turning into the hottest asset in the trading market. It is already attracting the interest of institutional traders and well-known financial companies, but even with this incredible growth, and with the amazing increase in its use, it is still very complicated for the average Joe to use it as currency on a day to day basis.
For years crypto hardware wallet companies have been trying to make the process of using cryptos a simple thing. The whole idea is to enable the usage of Cryptos to be as easy to use as cash itself; however, this attempt is still seriously underdeveloped. Even so, there are already a lot of good options in the market designed to allow for crypto users hold their coins and at the same time, to allow them to use it without losing a high level of security.
What is a Cryptocurrency Wallet?
A cryptocurrency wallet is basically a software application that is capable of securely storing the private and public keys for digital currencies. Every wallet is specifically designed for a specific cryptocurrency and interacts with the blockchain to enable users to send and receive digital currency while allowing monitoring and managing their balance. In order to be able to send and receive Bitcoin, a user needs to have a cryptocurrency wallet. Crypto Wallets are divided into big groups: Cold\Offline Wallets and Hot\Online Wallets. There are also several types of Crypto wallets:
- Web Wallets
- Desktop Wallets
- Mobile Wallets
- Hardware Wallets
- Paper Wallets
Basically, the wallets are ruled by the same cryptographic principle and they all do pretty much the same thing, but some have different uses and stronger security. Nevertheless, in this guide, we are only going to take a look and talk about Hardware wallets.
What is a Hardware Wallet?
A Bitcoin Hardware wallet is a physical device that allows storing Bitcoin public and private keys. It is a physical device that essentially protects and facilitates one’s payments and keys, privately. It is immune from viruses so it remains protected from potential security breaches. It is also another form of cold storage much like a paper wallet which enables the chance of storing your Bitcoin offline. As it is offline, its security increases a lot. Hardware wallets work in two parts: when the device is connected and when the device is not connected to the internet.
The connected wallet holds the public keys and performs all the functions of a standard wallet by choosing which transactions to sign. However, it can’t sign it as the offline device holds the private key. The connected device grasps the public keys, performing all necessary jobs of an average wallet by selecting which dealings to sign. In any case, it cannot be used to sign it because the offline device has the private key.
Why should you use a Hardware Wallet?
Most people, who purchase Bitcoin online, keep their owned BTC online as well. However, storage of Bitcoin on a Bitcoin wallet that is online and linked in more than one way to the Internet, more commonly known as a ‘Hot wallet’, for a long period of time can be a cause of apprehension for most users. This is because there is always a major chance of losing the stored Bitcoin to an attack by hackers.
In order to keep owned Bitcoins safe and secure, going for Bitcoin Paper Wallets or Hardware Wallets is the smartest thing a BTC owner could do. Unlike Online wallets, these are Cold wallets where the ‘keys to the wallet’ or the Seed is owned only by the owner of the Bitcoins and it is not present just on any server. Buying one of these is probably the most important thing a Bitcoin enthusiast needs to have.
Hardware Bitcoin wallets offer most of the security that paper wallets offer. Although they are susceptible to physical stealing, they eliminate the procedure of needing to consign the private key in the format of wallet import to particular software which could be susceptible to online threats.
How to use a Hardware Wallet
Using a Hardware Wallet is pretty straightforward. The process is practically the same in any of the Wallets available in the market. Depending on the brand, you may find a few different procedures, but it is usually pretty much the same.
Any Hardware wallet comes with a USB cable. You will need to connect your wallet to a computer with the web app installed. For instance, Ledger wallet uses a web application that binds on to the wallet and helps you control your funds.
- Setting up a new wallet
When you connect your Hardware Wallet it will start the setup process. The wallet asks you if you want to set up a new wallet. After that, it asks you to choose a four-digit pin. In the next step, it will ask you to set up a password recovery phrase. You may choose the password phrase yourself or select the one given by the device. It is very important to write down this password phrase because it will be the only way you will ever recover your wallet if anything happens. Once you have completed this simple process you are done. You will have the web app to help you manage your funds, but any transaction needs to be confirmed using the device.
A look at the Best Bitcoin Hardware Wallets
Nowadays, there are a lot of Bitcoin Hardware wallets at the user’s disposal. The cheer number of Hardware Wallet developer Companies is also growing by the day as the industry tends to introduce new and improved equipment in the market. Here are some of the best Hardware wallets in the market at the moment:
- Ledger Nano S
Ledger Nano S is a highly smooth, strong, safe and affordable Hardware wallet in the market, by far one of the most low-priced Hardware wallets that are available in the market at $69.80. The device is a multicurrency wallet made on a smartcard device and it is very light in weight. It needs to be connected to a USB port directly so as to manage the user’s account, safeguard Bitcoins, making secure payments. Alongside Bitcoin, the device lets the user store nine other major cryptocurrencies (Ripple, Dash, etc.)
Trezor is a protected transaction signing and storage tool for Bitcoins considered to be one of the leading hardware wallet solutions in the market, prominent for the advanced security options that accompany it. This Bitcoin wallet supports Windows 7-10, OS – 10.8+ and Linux. The security features are very strong with every Trezor device having a distinctive PIN code. Trezor functions similar to a Ledger Nano S. Both produce a twenty-four-word phrase which can be put to use in case the private key is lost and needs to be recovered. The cost of a Trezor is about $99, making it pricier than Ledger.
Together with BTC, the Trezor device also supports seven other cryptocurrencies, including ETHC, ETH, DASH, XRP, and others.
KeepKey is a hardware wallet device founded on a USB interface. The manner in which the KeepKey is designed is unique because when a user is configuring or using it, he or she will be required to assess and approve each and every Bitcoin transaction which will be made to undergo the authorization and exhibition facility it delivers.
A highly useful characteristic of the KeepKey is that it collaborates with any prevailing wallet software by taking the duty of managing a private key generation, deal signing and private key storing. A feature of KeepKey critics often attacks is its lack of complete cryptocurrency support. Offering support for only six currencies, way lesser than its competitors, it can be purchased at a cost of $99.
OpenDime comes in a mini USB shape, and setting it up is very fast and simple. it is a very small USB stick that lets the user spend Bitcoin in a way that normal dollar bills are spent. The user just has to plug his or her OpenDime into a USB port, after which the device acts just like any normal USB drive. With a little amount of storage, in the hardware wallet’s folder, a web page can be found which is to be opened in the user’s browser.
- Digital Bitbox
Unlike its peer Trezor, Digital Bitbox offers offline backup and retrieval of BIP-32 seed with a micro-SD card instead of BIP-39 lines inscribed on paper as in Trezor. The device also offers a native software wallet client and it is also able to put to use a smartphone to authenticate transaction information.
Coming in the price range of $69.99, the hardware wallet physically appears a bit more like a normal flash-drive compared to its counterparts. It also gives the user the option to have a secondary password which can be used to mask his or her balance in the main addresses.
Despite the fact that these devices appeared quite recently, they showed a good security level. Up until now, there is no report of tokens being stolen from a hardware wallet. However, it’s important to understand that using a hardware wallet does not come with its own risks. There is always a possible vulnerability. It’s important to take it into account when choosing one of these devices. It is important to stay updated and avoid possible malware. You always need to remember that using a hardware wallet is entirely up to you. Keep in mind that it doesn’t prevent you from sending your tokens to a wrong address. To increase your security, it is highly recommended that you double check everything and double check it again before you do any transaction. It’s also recommended to use a 2 Factor Authentication to confirm a transaction.