Hardware wallets: which models are the most popular
By Hennadii Cholovenko 2181 12 Nov 2022
Hardware wallets for cryptocurrencies are the most reliable form factor for storing crypto assets. Let's take a look at what these are capable of, who should use them, and what to pay attention to when buying.
Crypto assets can be stored in many ways. On the wallets of centralized exchanges, on mobile, browser, desktop and hardware wallets. The last option is the most secure and autonomous.
Hardware wallets are a type of cold wallets with a physical (hardware) form factor. On the outside, the hardware wallet resembles a flash drive or a key fob with a compact screen.
The most popular models are Ledger and Trezor. Both manufacturers have budget and more expensive models with extended functionality.
Hardware wallets connect to computers via a USB port. To work, you need to install proprietary software that interacts with the wallet and allows you to perform all financial operations.
It is worth knowing that the main advantage of such devices is transparent control of your finances, as well as confidential and safe storage of your assets. By storing assets on hot wallets of centralized custodial services (CEX exchange and various software wallets), you delegate the function of their storage, because these services have private keys. In the event of a hacker attack and theft of funds from the servers of such custodians, your assets may be lost forever. This is similar to the story of storing fiat money in a bank, which can also be robbed by a massive hacking attack or a physical breach of the central vault.
Hardware wallets are a non-custodial service, meaning that the owner independently stores assets and is responsible for their security with private keys.
There is a saying among cryptoheads: "Whoever has the keys (private) has the crypto." And this is completely true.
After connecting the hardware wallet, it is necessary to create a secret (SEED) phrase, with the help of which it will be possible to restore access to the wallet if the owner accidentally forgets the password. The SEED phrase contains a certain number of randomly generated words that must be entered in a clear sequence. For example, in Leger hardware wallets a phrase contains 24 words. It is advisable to save the SEED phrase in several copies on different media (electronic, paper, etc.) and in different places (in a safe, on a flash drive, etc.). The SEED phrase is your spare key to the door of your own crypto-storage, so its storage should be handled responsibly. Otherwise, if you forget your password and lose your SEED phrase, your assets may be lost forever. A third party or organization will not be able to restore them.
The standard approach to storing cryptoassets is as follows. Large amounts of coins and tokens must be stored in hardware wallets, and small amounts for everyday trading can be kept in custodial services.
Let’s take a look at the most popular hardware wallets.
More than 5,500 types of assets of various classes can be stored on the Ledger, with 80 of which one can perform active operations (purchase, exchange). With almost thirty Proof-of-Stake cryptoassets, staking is also available. Ledger hardware devices integrate with more than 50 software wallets and trading platforms.
The budget model Ledger Nano S Plus does not have a battery, but is almost half the price of the more expensive model Ledger Nano X. The latter is equipped with a battery and Bluetooth.
Wallets are managed using Ledger Live software, which allows not only to conduct transactions, but also to install decentralized applications (dApps) with connections to Web 3.0 projects. There is also a mobile application that can be downloaded from Google Play or the App Store.
Trezor allows you to store up to 1,500 of the most popular cryptoassets, including stablecoins and ERC-20 tokens.
The budget Trezor Model One has two mechanical buttons, while the top Trezor Model T is equipped with a 1.54” color touchscreen and can store a more extensive list of cryptoassets (this model is currently the most expensive and costs almost €190).
Wallets are managed through the Trezor Suite software.
Trezor plans to add CoinJoin's private transfer function and publish a mobile app on Google Play soon.
Ledger and Trezor are leaders in this segment and have created quality devices for different budgets. They are the most popular solutions on the market today. Ledger Nano S and Trezor Model One with a $60 price tag are considered popular models by the number of sales.
If you decide to buy a hardware wallet, never buy a used device. Order such wallets only online from manufacturers’ branded stores or official distributors with an impeccable reputation. This ensures that there are no backdoors (malicious applications) through which your assets can be withdrawn by hackers.