All About Wallets Choose a Wallet Type Hardware Wallets

Lesson 5, Chapter 6

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Hardware Wallets

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The more people invest in cryptocurrencies, the more important it becomes to have a safe, secure way to store cryptocoins from the prying eyes of hackers. Hardware wallets are one of the best choices for safe, long-term storage of cryptocurrencies.

Stop Cyber

Thieves!

Hardware wallets are a key component of the blockchain ecosystem and act similar to an encrypted flash drive. They provide a layer of security and utility when transacting with blockchains. They are considered cold wallet security because they are disconnected from the internet when not in use. As I already mentioned, they are perfect for long-term holding.

While hardware wallets are more secure than hot wallets, they are not completely infallible. However, for a hacker to hack a hardware wallet they must have the wallet in their possession and own some sophisticated equipment.

Another way for a hacker to hack a hardware wallet, is they can trick you into giving up your seed phrase. Don’t fall for phishing scams! Some well-known methods used to trick people out of their seed phrase is with Google Chrome Extensions. For this reason, I never use extension wallets in crypto transactions, like Metamask.

A hardware wallet is a special type of cryptocurrency wallet that stores a user’s private keys in a secure offline hardware device (see Lesson 2 Chapter 2 for more info on private keys). The main purpose for using an offline hardware wallet is to provide an airgap between the device holding your crypto balances, public addresses, and private keys from the ever-hackable internet.

Hardware wallets have four major advantages:

strong security against cyber-attacks, phishing sites, and malware
allows for safe offline storage of multiple assets in one location
can be used interactively with online platforms
backup seed phrase allows funds to be recovered if device fails

Here are a couple disadvantages of hardware wallets:

firmware must be updated regularly, firmware failures possible
less convenient due to extra steps for accessing and spending cryptos

Luckily the firmware update process is relatively easy, you just have to remember to do it every now and then.

Ledger Nano

Ledger is one of the most respected and credible companies in the hardware wallet space. They use their proprietary technology to develop secure wallet solutions. Their production facility is in Vierzon, France and they have offices in San Francisco, USA. The company was founded in 2014 and in June 2016 they launched their very popular Ledger Nano S.

Over 1.4 million sold worldwide!

Even though Ledger came out with a newer model in 2019, the Ledger Nano X, I still prefer the Ledger Nano S and many users across the globe agree. When I first bought the Nano S two years ago, I paid $119. I currently own 4 of them. Some were given to me as gifts. Currently the Ledger Nano X is priced at $119, while the Ledger Nano S is $59.

The Ledger Nano S and the Ledger Nano X both support over 1,000 different cryptocurrencies. One of the biggest differences between the Nano S and Nano X is that the Nano X supports Bluetooth and the Nano S uses a wired connection.

Here’s a quote from a review on blokt.com:

“… the Ledger Nano S is a testament to the importance of simplicity and usability. Similarly, the Ledger Nano S supports a massive range of crypto assets and has subsequently become the hardware wallet of choice for a wide cross-section of cryptocurrency users.”

BUT BEWARE! If you decide to purchase a Ledger Nano, I have one very strong piece of advice. ONLY BUY YOUR LEDGER FROM LEDGER.COM. If you purchase from any other source, you run the risk of a hacker replicating the Recovery Phrase Sheet making it possible for them to steal ALL the crypto stored on your device.

Trezor

TREZOR products are manufactured by Satoshi Labs which was founded in 2013. The popular Trezor One was launched in August of 2014. According to my research the Trezor One costs about the same as the Ledger Nano S, around $59 or $69.

World’s first secure bitcoin hardware wallet

The Trezor One is a small device that connects to a computer using a USB cable. The Trezor One functions similar to Ledger Nano products in that they each protect your private keys by keeping them on a hardware device separate from a computer and from the internet.

Unlike its main competitors, the Ledger Nano S and Nano X, you don’t need to download individual apps to the device in order to store multiple different cryptocurrencies. Instead, the wallet setup process automatically creates accounts for multiple different crypto assets, making for a simpler user experience.
excerpt from Decrypto.co

The device supports over 1,000 different crypto assets, but what is interesting is the list of popular cryptocoins it doesn’t support:

XRP, EOS, Tron (TRX), Tezos (XTZ), Cardano (ADA), Monero (XMR)

OOPS! Even worse than not supporting these popular coins, in 2019 a popular crypto exchange made claims that they were able to hack both models of the Trezor. Ouch!

Here’s a quote from Kraken’s blog:

“Kraken Security Labs has devised a way to extract seeds from both cryptocurrency hardware wallets offered from industry leader Trezor, the Trezor One and Trezor Model T. The attack requires just 15 minutes of physical access to the device.”
blog.kraken.com

Granted, this sounds really bad, but the device has to be stolen before it can be hacked. A safe deposit box solves that problem. Plus, this image tells me not just anyone has the smarts to do this. Especially not your run-of-mill neighborhood crime of convenience thief.

Cobo Vault

The Cobo Vault company is headquartered in Bejing, China. The Cobo Vault hardware wallet calls itself the next evolution of crypto cold storage. It is an impressive durable wallet with military grade components making it waterproof and impact resistant.

Next gen hardware wallet.

The device uses a proprietary bank-grade ‘Secure Element’ technology that ensures the private keys never leave the Cobo Vault. According to their website the Secure Element generates a true random number for creating private keys.

Military grade components!

In Chapter 2 I briefly discussed the importance of random numbers for generating private keys and how vital it is to ensuring that crypto assets are kept safe. So, the fact that this company has placed emphasis on the random number generator says something to me about the quality of their product.

The Cobo Vault Ultimate hardware wallet has a 4-inch touchscreen and rechargeable battery and supports hundreds (not thousands) of cryptocoins.

But according to my research, possibly the best feature on this device is the Hidden Vault. The hidden vault offers crypto owners another secure option for storing crypto assets in case of attack where one is forced to share the passcodes. Users are able to setup a hidden vault within the wallet which can’t be seen from the main screen. This means users can hide their funds within the wallet from prying eyes in case the device is ever lost or stolen. An unlimited number of hidden vaults can be created, each with different passcodes. This is impressive! I can’t wait to try one!

But as you might expect, a device with so many features has a hefty price tag, and you are correct. The price for the Cobo Vault Ultimate is $479.

KeepKey

KeepKey is an affordable hardware wallet solution currently available for storing bitcoins and other cryptocurrency altcoins. Keepkey was founded in 2014 in Seattle, Washington USA. In August 2018 Keepkey was acquired by Shapeshift, a leading decentralized asset exchange. So I would expect to see this hardware wallet integrated more and more with software wallets that use the Shapeshift exchange for in-wallet trades.

KeepKey supports about 40 different crypto assets and when comparing this device to the competition, it lacks reputation. However, the reviews I’ve read claim it is still a solid hardware wallet. It has a similar backup seed key feature with a pin code that works like the other hardware wallets.

KeepKey can be purchased from the Shapeshift website for $49. I have not used this wallet.

GridPlus Lattice1

GridPlus and its subsidiary GridPlus Energy are American companies based in Austin Texas, founded by Mark DAgostino and his team. I’m very excited about this company and what they are doing. If I lived in Austin, Texas I would be participating in their vision. What does this have to do with wallets, you might ask?

Affordable energy with crypto.

Here’s an excerpt from their website:

GridPlus creates products that enable mainstream use of digital assets and cryptocurrencies. We are hardware, software, and cryptocurrency experts building the foundation for a more efficient and inclusive financial future. GridPlus Lattice1 and SafeCards use uncompromising security to enable the most secure cryptocurrency storage ever created.
GridPlus Energy is a retail electric provider (REP# 10256), currently supplying residential electricity in the CenterPoint and Oncor territories in Texas. We offer home energy users the unique ability to pay in cryptocurrency, … using intelligent software, hardware, and blockchain technologies. With these technologies, we will lower electricity costs, … allowing everyday people to participate in fluctuating electricity market prices in real-time.
https://gridplus.io/energy

In order for the GridPlus Energy system to work the way it is envisioned, the team first had to create the software and hardware that would interface with the Ethereum blockchain and allow crypto payments. This is how the Lattice1 hardware wallet came into being.

The Lattice1 is the cornerstone of the world’s first fully integrated system for securely storing and spending digital assets. At its core, the Lattice1 is a tamper resistant hardware wallet that links to your phone, your electricity meter, and other IoT devices. With the Lattice1, you control your keys. Pair with any supported app to access your wallet from anywhere. Looking up balances, sending transactions, and switching between the Lattice1 and SafeCard wallets are all a breeze.

Currently the Lattice1 is only available to developers during the testing phase. The first ones shipped in July 2020. But stay tuned! I am following this project closely and I believe the Lattice1 could become a welcomed addition to people’s crypto management solutions.