20 Dec What is a Cryptocurrency Hardware Wallet and Why You Should Use It
What is a Cryptocurrency Hardware Wallet?
A hardware wallet is a physical device created to keep your cryptocurrencies safe. The wallet stores your private keys in an offline settings, making it impossible for malicious actors online to steal your coins. There has been no coins stolen from Trezor or Ledger to date, making it the safest option to keep your coins.
Hardware wallets offer greater security than software wallets, as the hardware wallet generates a private key and stores it on the device. The private keys are also separated from the vulnerable and connected internet and maintained in a safe offline environment. This means that your private keys are safe even if you plug it into a compromised computer. All transactions are also executed on the device, and it requires you to physically press a button to confirm the transaction.
Why should you use it?
While storing coins on the exchange is convenient, you don’t really own the coins unless you have the private keys to your wallet. There have been numerous exchange hacks over the last few years:
- Mt. Gox – Approximately 850,000 Bitcoin were stolen in 2014 – $15.3 billion in today’s price
- Bitfinex – Approximately 120,000 Bitcoin were stolen in 2016 – $2.16 billion in today’s price
- Nicehash – Approximately 4736 Bitcoin were stolen in 2017 – $85 million in today’s price
- Youbit – Approximately 4000 Bitcoin were stolen in 2017 – $70 million in today’s price
Users could have prevented their coins from getting stolen if they stored their coins in a hardware wallet.
The hardware wallet industry is dominated by 2 companies – Ledger Wallet and Trezor. Ledger Wallet has Ledger Nano S and Ledger Blue, while Trezor has Trezor and releasing a new model Trezor T early year. Ledger Wallet is a company based in France, while Trezor is from Czech Republic.
Ledger Nano S:
- – Ark
- – Bitcoin
- – Bitcoin Cash
- – Bitcoin Gold
- – Ethereum/ Ethereum Classic
- – Expanse
- – Dash
- – Digibyte
- – Dogecoin
- – Hcash
- – Komodo
- – Litecoin
- – Neo
- – Pivx
- – PoSW
- – Qtum
- – Stealthcoin
- – Stellar
- – Stratis
- – Ubiq
- – Vertcoin
- – Viacoin
- – XRP
- – Zcash
- Bitcoin Cash
- Bitcoin Gold
- Ethereum Classic
Both wallets support ERC20 tokens, and you can access them via MyEtherWallet.
Q: What should I do if I lose my hardware wallet?
A: You can recover your wallet with your recovery seed, either with a software or hardware wallet as long as they are compatible with BIP32/39/44.
Q: Are my coins stored in the wallet?
A: No your coins are on the blockchain. Your wallet hold the private keys to access your coins on the blockchain.
Q: Do I need to keep my wallet connected to receive coins?
A: No. You will only need to provide your address to the sender, and the transaction will take place on the blockchain and not on the wallet itself.
Pennywise is the authorized distributor for Ledger Wallet and Trezor in Singapore, and all products come with local warranty. Please head over to our shop to secure your coins today.