By Natalie Lord
Gone are the days of Louis Vuitton or Chanel wallets if you’re a cryptocurrency enthusiast. What you need instead is a cryptocurrency wallet that will store your intangible funds appropriately.
A crypto wallet is in its simplest form an app, a website or a device that manages private keys to enable you to use your digital currency. Private keys which are chains of secret codes that enable you to use your currency. A crypto wallet is the equivalent of a bank account that allows you to send, receive and store Bitcoin and alternative currencies, and is comparable to how an online bank account works in relation to the traditional monetary system.
In the next few weeks we look at the different wallet options available so you can identify which wallet best serves your crypto needs.
Hardware wallets are tangible electronic devices built specifically for the sole purpose of securing cryptocurrency tokens.
A hardware wallet needs to be connected to a computer, phone or table in order for you to be able to spend or move your coins.
Hardware wallets are a sound option if you want to make sure you’re storing your coins in a secure space with reliable storage. They ensure private keys are kept separately from more vulnerable devices that are connected to the internet. Private keys are kept in a safe offline space on the hardware wallet, and are fully protected even in the event that the wallet is connected to a computer infected with malware.
Cryptocurrencies are digital assets and therefore vulnerable to hackers who could potentially target your computer’s software wallet and steal them by accessing your private key. A hardware wallet ensures this isn’t possible because cyber criminals have no way of getting to your coins. To do so they would have to steal the physical hardware wallet, and even if they did this you can protect your hardware wallet by enabling a PIN code.
Another advantage of a hardware wallet is that if you lose it or it’s damaged you can still access your coins, as long as you’ve created a secret backup code. It seems failsafe, like a steel vault, and given the option, who wouldn’t want their assets to be stored like that!
The two most popular hardware wallets are currently the Ledger Nano X and Trezor T.
The Ledger Nano X retails for US$119 and is Ledger’s latest hardware wallet. What gives this wallet the edge is that it has Bluetooth, making it the first hardware wallet to be able to connect with iOS devices. All transactions are signed with the Nano X, making it more secure than simply using an app on your phone.
The TREZOR Model-T costs US$165 and is a second-generation crypto hardware wallet. The TREZOR line launched in 2014 with the TREZOR One, which was the first Bitcoin hardware wallet, offering secure Bitcoin storage together with the option of spending funds with the convenience of a hot wallet. It has consistently remained one of the most popular cryptocurrency storage solutions to date.
So what’s the downside? The only disadvantage of hardware wallets is that they’re not free, but considering they retail at a fraction of the cost of a steel vault yet offer the same level of security, it seems a small price to pay.