Storing cryptocurrencies safely and securely is paramount. No one wants to fall victim to an exchange filing for bankruptcy or getting hacked, resulting in losing customer funds. Many hardware wallets are on the market, serving specific purposes and offering security and peace of mind.
Hardware Wallets Are Often The Best Option
Getting involved in cryptocurrencies is more than buying and selling Bitcoin, Ethereum, or altcoins. It also comes with new responsibilities, including storing and managing funds. Many users opt to do so through centralized exchanges, as those platforms facilitate the buying, selling, trading, and storing of crypto assets. Convenience is often the primary concern for industry newcomers, even if that has some drawbacks.
The user controls the funds with hardware wallets and takes custody of their digital wealth. Exchanges, however, retain control over user funds, like a bank controls the money you store in a checkings or savings account. Cryptocurrency is designed to empower users and give them financial freedom. However, many users are scared of that responsibility and gladly relinquish their newfound financial freedom immediately.
That said, storing cryptocurrencies in a self-custodial manner isn’t without risks. There is a good chance many people will lose [part of] their funds. It is more than moving funds to a new wallet address. There is also the process of creating and backing up security keys and seed phrases. In addition, users can never lose their devices, which is harder than one may think. Another concern is how the security keys can’t be passed on to “next of kin” if something happens to the original device owner.
Centralized exchanges like Binance provide the necessary tools to address these concerns, per a Twitter Space discussion with its CEO. He also mentions how using hardware wallets is always advised for those who are “technologically savvy enough”. However, newcomers must be aware of the risks associated with self-custody. Those willing to brave that challenge have a few good options.
Ledger (Nano S Plus/Nano X/Stax)
Based in France, Ledger has quickly become one of the industry leaders for hardware wallets. Its three flagship models cater to different needs, ranging from entry-level crypto storage to a mobile-first day-to-day device and an advanced version with a curved E-Ink touchscreen. Prices range from 79 euros (Nano S Plus) to 149 euros for the Ledger Nano X, and 279 euros for the recently released Ledger Stax.
All models support thousands of cryptocurrencies, tokens, assets, and NFTs. In addition, they all work with the Ledger Live app, found on desktop and mobile. However, only the Nano X and Stax offer Bluetooth connectivity, whereas the latter also features wireless charging (rather than a USB cable). Moreover, all Ledger units are compatible with third-party software wallets, making crypto storage and management a highly customizable experience.
The SafePal ecosystem comprises a range of features and solutions to securely store cryptocurrencies. Users can experiment with the app, Chrome browser extension, and the hardware unit. Its software wallet is suitable for newcomers and experts who aim to buy, sell, and trade on the go. The Chrome extension provides the top-tier multi-chain capability for users who keep a diversified portfolio. In addition, the hardware unit – SafePal S1 – keeps coins 100% offline and has never been hacked before.
The SafePal S1 offers secure and convenient cold storage solutions for crypto veterans. For many, hardware wallets will be the gateway to Web3, and a smooth experience is essential. Moreover, it is a very affordable device – priced at $49.99 – and users can buy a cypher to protect their seed phrase with ultra security. The cypher is compatible with other hardware or software wallets adhering to the BIP39 standard.
Trezor (Model T/Model One)
Trezor is, along with Ledger, one of the biggest players in the crypto hardware wallet sphere. Its two flagship models are very different on the surface but provide the same carefree and secure storage solution for hundreds of crypto assets. Moreover, both the Model T (265 euros) and Model One (69 euros) support buying, selling, and swapping. They will also receive CoinJoin support to provide users with better privacy and anonymity. The Model T provides a touchscreen for PIN & passphrase entry, whereas the cheaper model requires using a computer or mobile device.
In addition, both models provide a standard seed backup solution, with the Model T adding an Advanced Shamir Backup option for extra security. Trezor also makes its device architecture and suite software open source.
The company recently dealt with allegations by Dan Reich, who claimed to “crack” a Trezor One hardware wallet. After losing the PIN, Reich, and hacker Joe Grand, tried to recover it from the device’s RAM during a firmware update. The team succeeded in recovering the PIN by deploying a fault injection attack. Trezor fixed this exploit in 2017 and required full physical access to the device. To the company’s knowledge, no funds have ever been compromised through this method.
Although many people may be unaware the Satochip hardware wallet exists, it is a very suitable product. It checks the right boxes with support for hundreds of cryptocurrencies, a mobile application for a streamlined user experience, and high protection against penetration attacks. Moreover, it doesn’t look like a traditional crypto hardware wallet, as it is designed like a bank card. Plus, it is affordable – at 25 euros – although users can pay a bit extra to customize its look.
Satochip started as a Bitcoin-only hardware wallet but has enabled support for thousands of other assets since. Users can manage their cryptocurrencies through a mobile application – Android only, unfortunately – as there is currently no desktop client. On the security front, Satochip uses a PIN code – required for private keys and signing transactions – and allows for two-factor authentication through the Android app.
The Opendime hardware wallet is an excellent option for users who only keep Bitcoin in their portfolios. The unit is developed by Coinkite and is compatible with any computer, laptop, or phone (via USB). Moreover, it is very easy to set everything up. Unlike other wallets, the Opendime is designed to pass Bitcoin like cash to anyone else without needing on-chain transactions. Users can load the USB stick with a BTC balance, and the recipient can withdraw funds after breaking the seal to access its private keys.
That said, the hardware wallet doesn’t allow for backing up funds stored on the device. In addition, users must “break” an Opendime to spend its BTC balance. Those aspects make it ill-suited for storing large amounts of BTC in most cases. However, for those who use BTC as a payment method regularly, handing off a USB stick is faster than waiting for on-chain network confirmations. It is more of a piggy bank than a cold storage device for crypto wealth, but it can be used to store vast sums of BTC long-term for those with a strong HODLER mindset.
- @ December 19, 2022 6:13 pm