Hardware wallets are by far the most secure option for keeping your valuable Bitcoin secure.
Here’s the thing:
Hardware wallets cost money.
We know… paying for stuff sucks, but the security hardware wallets offer are unrivaled by software wallets.
Below, several well know hardware wallets are compared and contrasted to help find the best Bitcoin hardware wallet for you!
Why are Hardware Wallets so secure?
Hardware Bitcoin wallets offer the most security out of any other storage method due to them having multiple lines of defense.
- PIN Codes that must be entered in person
- Backup phrases used to recover private keys from a lost, stolen or broken wallet
- Offline storage. If done correctly, hardware wallets can be set up without ever exposing them to the outside world.
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.
How is the Ledger so secure?
The functioning of the Ledger Nano S is simple yet impressive. Bitcoins stored on the device are kept secure with the use of a microchip and a PIN code. Outgoing 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 Ledger Nano S is made in a way that ensures that all sensitive actions are done inside the protected component integrated on the microchip. This means that your private keys are never held or seen by Ledger or outside world, as long as they are solidly sealed inside the user’s device.
No software, app, or hacker can ever gain access to the private keys if the device is setup correctly.
You may be thinking…
What if someone steals my Ledger!?
In the event your device is stolen, the backup phrase used to set up your wallet can be used to recover the contents of your wallet. The thief will have only a few tries to get by your PIN code before the device wipes itself locally.
Does it just store Bitcoin?
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. In the event multiple currencies are stored on the wallet, they each have their own private key.
How do I setup my Ledger Nano S?
Instructions are included with the device, but we also have a written guide on our Ledger Nano S review.
How do I use my Ledger Nano S?
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. Upon connecting the device to a computer, you will want to download the Google Chrome Ledger manager app where you can manage the device.
The device has two buttons on it that are used to navigate its menus. The left and right buttons correspond to up or down. Clicking both at the same time is how you “confirm” or continue to the next menu.
The Ledger Nano S is all around the best Bitcoin hardware wallet for your money.
Trezor is also one of the older names in the cryptocurrency wallets business. Trezor’s sell for 89€ + shipping, making it slightly more expensive than the Ledger Nano S.
What makes the Trezor so secure?
The first line of defense for the Trezor device is a distinctive PIN code. Upon initialization, the device asks you for a PIN code. Even if the computer the Trezor is plugged into gets hacked, the PIN can never fall into the hands of the hacker. The storage of private keys takes place on the Trezor in a way that the keys are unable to leave the device.
Trezor also has two-factor authentication that can be used to add extra security. The most common form of two-factor authentication is Time-based One-Time Password (TOTP) which allows authentication codes that change every 20 seconds or so to be required for access.
What if I lose the device?
Upon initialization of your Trezor, you will be given a recovery seed. This recovery seed helps in recovering information such as private keys and transaction history in case an owner loses their Trezor.
How do I use my Trezor?
Upon creating a transaction, a transaction template is sent to the Trezor, requesting 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. If you wish to proceed with the transaction, validate it by clicking the correct button on the device. This Bitcoin wallet supports Windows 7-10, OS – 10.8+ and Linux.
Along with Bitcoin, Trezor also supports the following cryptocurrencies:
- Litecoin (LTC)
- BCash (BCH)
- Ethereum (ETH)
- Ethereum Classic (ETC)
- Dash (DASH)
- Zcash (ZEC)
- Dogecoin (DOGE)
- ALL ERC-20 tokens
Keepkey is another Bitcoin hardware wallet with a minimalistic design that costs $99 plus shipping. The decently sized crystal clear screen of the device makes it easy for the user to navigate its menus.
KeepKey takes over the management of private key generation, private key storage, and transaction signing. Private keys stored on the device are kept in a way ensuring no outside source can access the sensitive information.
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.
Keepkey Recovery Phrase
Keepkey defaults to a 12-word passphrase, but 18 and 24-word phrases can be used. For the most part, the longer the passphrase, the more secure your wallet is. This passphrase can be used to recover information and private keys from the device in the event it is broken or stolen.
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.
OpenDimes are sold in packs of three for $37.50 plus shipping. They function much differently than other cryptocurrency hardware wallets. The whole idea of OpenDime is to be like cash where you physically hand over the bills. In this case, you hand over the OpenDime.
For long-term holders of Bitcoin, this might not be your best option as it focuses on in-person transactions.
To get started with the device, plug it into your computer. Setup guide instructions are in a readme file that shows upon insertion. The device asks you to insert a random file which is used to create a unique private key.
After the key is initialized, load the OpenDime with any amount of currency. The private key of the device is completely secure until it is “opened”. Using a small item like a dime, you can easily remove a component to expose its private key.
From here, you can plug it back in to access its contents.
Here are some situations where OpenDime can be used from the official website:
- Gifting someone a Bitcoin! Preload an Opendime and mail it to a friend.
- Deliver the payment for a car when you go to pick it up. Just put your payment on an OpenDime and hand it over when you get the keys. Private key for car keys!
- Load a number of Opendimes with various denominations of Bitcoin. Keep them in your pocket to pay for things throughout your day.
- Sell Opendimes, preloaded with value, in exchange for gold or other precious metals.
- Use this instead of a paper wallet. Just as “compatible” but takes care of generating the private key safely.
What other cryptocurrencies can OpenDime store?
Opendime currently supports Bitcoin and Litecoin although it is possible OpenDime adds new currencies in the future.
Is OpenDime secure?
OpenDime is secure as long as it is untampered with. The private key is completely hidden until the piece is broken off. Hardware components are exposed on the outside of the device but pose no security risk.
Made in Switzerland by Bitcoin Core creator Jonas Schnelli, Digital Bitbox Hardware Wallet is a protected hardware RNG & key storage that makes storing Bitcoin as simple as possible. It doesn’t have a screen, and is managed through the device it is plugged into.
How secure is Digital Bitbox?
Digital Bitbox is extremely secure, as it uses Encrypted USB communication, tamper-resistant chips, and the option of two-factor authentication. Offline backups can be created using the Micro SD slot on the device.
Digital BitBox is completely open source and available to view here. Open-source code is great to have on any software project as it allows the code to be reviewed for bugs and malicious files. No such files have been found and the project is completely trustworthy.
What other coins does Digital BitBox support?
Digital BitBox currently supports Bitcoin, Litecoin, Ethereum, Ethereum Classic and all ERC-20 tokens. It is possible more cryptocurrencies are added in the future.
Why are hardware wallets important?
A majority of new Bitcoin users decide to leave their Bitcoin’s in online exchange wallets such as Coinbase. While this is convenient, you are not keeping your cryptocurrency secure. Private keys ultimately decide who owns the Bitcoin. When Bitcoin is left in a wallet like Coinbase they hold your private key for you.
If you want to use your Bitcoin to transact, consider also having a hot wallet. Hot wallets are typically software wallets that store lesser amounts of Bitcoin. These are great for spending Bitcoin on everyday items.
You can never be too secure when it comes to cryptocurrency, which is why hardware wallets are the #1 option for storing cryptocurrency. Depending on your needs, certain cryptocurrency wallets are better than others.