Why use Hardware Wallets?
Hardware Bitcoin wallets offer the most security out of any other storage method. They have multiple lines of defense such as pin codes, 20+ word back up phrases as well as needing the device in person to move the coins off it. It is possible to set up a hardware wallet without ever exposing its private key to the outside world.
Below we will compare and contrast the most popular Bitcoin hardware wallets, to help you figure out which is the best for you.
Ledger Nano S
The Ledger Nano S is the most popular hardware wallet at the moment. It is aesthetically pleasing, and extremely secure. They come at the price of 79€ and have free shipping. Never purchase a Ledger Nano S from anyone or anywhere that is not the official website.
What I love about the Ledger Nano S is that it is a multi-currency cryptocurrency wallet. Here are some of the other cryptocurrencies the Ledger supports.
The Ledger Nano S can be used on any computer, regardless of the operating system. It works perfectly with Mac or Linux machines and is also companionable with Google Chrome on Windows 7-10, Mac 10.8+ and Linux.
The Ledger Nano S (review) uses normal USB ports and can also be utilized through a cellular device with a USB adapter. The management interface or the MI is an app for Google Chrome, which is easy to use and learn.
The functioning of the Ledger Nano S is simple yet impressive. Bitcoins and other cryptocurrencies owned by the user are kept secure with the use of a microchip and a PIN code. Transactions are only confirmed upon button presses, so even if your computer was infected with malware, it could not move coins without your permission.
The Nano S is designed through a technique which ensures that all sensitive Bitcoin actions are done inside the protected component integrated on the microchip. The private keys of your cryptocurrencies are never held or seen by Ledger or any other third-party services as long as they are solidly sealed inside the user’s smartcard device.
This feature of the Nano S gives the user an assurance that no software, app, or hacker can ever gain access to the private keys in any way. The user’s account can be reinstated from a backup in case a Nano S gets lost or stolen.
Since a PIN is required, even when a Nano S is physically stolen, very little can be done by a hacker trying to crack it. After a certain amount of incorrect PIN entries, the device will erase all sensitive information. As long as you have your back up phrase, it is recoverable from another Ledger or software wallet.
The Ledger Nano S is all around the best Bitcoin hardware wallet for your money.
Trezor is also one of the most popular Bitcoin hardware wallets and is very secure. This Bitcoin wallet supports Windows 7-10, OS – 10.8+ and Linux.
The production of private keys takes place on the Trezor making the keys unable to leave the device. This in turn again delivers ample assurance that no foreign party can ever have access to the private keys of a Trezor.
The Trezor device creates a retrieval seed at device initialization. This recovery seed helps in recovering all material including private keys and the complete history of transactions in case an owner loses his or her Trezor, making theft or loss of a device, nothing of disastrous damage to the user.
When a user wishes to make a transaction, the software just directs a transaction template to the Trezor, requesting for a digital signature. The Trezor then displays the specific amount that has been asked for and the address where the amount has to be sent. The user can then proceed and validate the action by just clicking the correct button on the hardware.
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 a bit pricier than Ledger (after shipping).
Together with BTC, the Trezor device also supports seven other cryptocurrencies, including Ethereum , Ethereum Classic, DASH, Ripple, and others. Trezor also supports ERC-20 coins that run other Ethereum’s blockchain.
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.
Its retrieval process works in a remarkable way where a spinning cipher is used to reinstate a retrieval seed. This feature implies that private keys are not required to be stockpiled on KeepKey.
The hardware wallet generates a private key with the help of its random number generator, an inherent feature combined with the chance factors from the user’s computer, a feature that lends additional power to the randomness of the key’s features owing to the use of two different sources.
The big screen of the device makes it easy for the user to navigate and check out the Wallet Address, although many have complained that the size of the screen is not that much of a helpful feature. KeepKey, like other hardware wallets, previously discussed, boasts a Seed Key and Private Key.
A feature of KeepKey critics often attack is its lack of complete cryptocurrency support. Offering support for only six currencies, way lesser than its competitors, it can be purchased for a cost of $99.
OpenDime is the first so-called ‘Bitcoin Bearer Bond’ or what is commonly referred to as a ‘Bitcoin Stick’. Size-wise, it is a very small USB stick that lets the user spend Bitcoin in a way that normal dollar bills are spent.
The device can be passed along several times. It can be connected to any USB port in case the user needs to check his or her balance. It can also be unsealed at all times if the user wishes to spend BTC online.
The device comes in a mini USB shape, and setting it up is amazingly speedy and simple. 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.
There is just one basic instruction to follow, which asks to drop a file onto the drive. Once that instruction is followed, the OpenDime automatically creates an exclusive address for the user to accept Bitcoin with.
Made in Switzerland by Bitcoin Core creator Jonas Schnelli, Digital Bitbox Hardware Wallet is a protected hardware RNG & key storage that uses the crypto element of a 50-year expiration period along with an epoxy-filled case.
Unlike its peer Trezor, the device 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.
This hardware wallet is ideal for technology buffs that stress on the need for having optimum security since all factors are open-sourced, and can be confirmed for security as per the will of the user. In spite of the device’s minimalist design, the wallet offers great functionality.
Need for Hardware Wallets
Most people, who purchase Bitcoin online, keep their owned BTC online as well.
However, storage of Bitcoins 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 Bitcoins to an attack by hackers.
Exploiting the ‘always connected to the internet’ feature of Hot Wallets, hackers see it as an easy opportunity to breach these wallets, leaving no trace of their crime, earning some ‘easy BTC’ in the process.
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. If Bitcoin is to be accepted widely as a mainstream currency, there needs to be an increase in the awareness and usage of these by-products of the cryptocurrency phenomenon.
The above-mentioned Hardware wallets are the best in the market.
Buying one of these is paramount for a BTC or other cryptocurrency enthusiast.