After more than 10 years of Bitcoin’s existence, the level of awareness of its holders about how to safely store assets still remains at a rather low level. Not everyone understands what a hardware wallet is and what it is made for.
Despite numerous reports of hacking of cryptocurrency exchange wallets and various types of wallets, followed by theft of user funds, many continue to be frivolous about this problem, preferring the simplest and most vulnerable storage options.
If you are one of those who are interested in the possibility of reliable storage of the main cryptocurrency, a hardware Bitcoin wallet is perfect for this purpose. Let’s examine their principle of operation and look at some examples.
How Do Hardware Wallets Work?
A cold wallet is cryptocurrency storage that does not have a permanent connection to the Internet. In this case, we are talking about local storage of files with private keys that provide access to addresses with bitcoins on the blockchain network.
Unlike hot wallets, which allow you to make transactions at any time, a cold wallet is not intended for frequent use in asset transfer operations. For the same reason, it becomes impossible for attackers to gain remote access to them.
Most often, a cold bitcoin wallet is used to securely store large amounts that are not used for a long time in trading, investing and other activities with cryptocurrencies.
Types of Cold Wallets
Depending on the method of technical implementation of the storage process, cold wallets are divided into several categories. Most of the following options are multi-currency solutions that support bitcoin, although there are ones created exclusively for it.
Hardware wallets are small-sized devices for storing several types of cryptocurrencies with a high level of security, the interaction with which is carried out only through computer equipment with installed native applications.
All sorts of USB flash drives, memory cards, and portable hard drives are a budget alternative to hardware BTC wallets. To comply with all the conditions of the category of cold storage, after recording private keys, these devices are removed from computer slots and stored in safe places.
The easiest way to create a cold wallet for bitcoin is to write down on paper the data needed to access the coins. Private keys can be written manually or printed both in the original form and in encrypted, including in the form of QR codes. Thus, a paper cold wallet is obtained, which must be stored at least in a place hidden from prying people, but best of all in a safe or a bank cell.
If you want to create a paper wallet for cryptocurrency, It is best to use special services like bitaddress.org that generate new private and public keys, for example, as a result of arbitrary user cursor movements.
Best Bitcoin Hardware Wallets to Use in 2020
Here is the list of the best hardware wallets for Bitcoin and other cryptocurrencies to use in 2020. These are the most secure and top hardware wallets.
#1. Ledger Nano Hardware Wallets
Today, these wallets are the most popular among hardware storage. The flagship model of the manufacturer Ledger Nano S looks like a flash drive and allows you to safely store a wide range of cryptocurrencies: Bitcoin, ZCash, Ethereum, Litecoin, Dash, Ripple. This crypto wallet is as convenient and easy to use as possible. Its price on the official website of the manufacturer is 65 euros.
The main advantages of the wallet:
Minimalistic design: the device looks like a flash drive;
Support for a large number of coins. Initially, it was proposed to choose no more than 4 from the list of available ones; with the update, support extended to all supported coins;
It works through its own applications, not only with all PC operating systems but also with mobile applications;
Data protection is carried out by several encryption chips;
As additional protection, there is a PIN code and confirmation via SMS;
There is also a Ledger Nano X wallet model. The Ledger Nano X combines ease-of-use and flexibility while ensuring the highest standard of crypto security. This wallet can be connected to your mobile via Bluetooth.
The Ledger Nano X can store up to 100 applications at the same time, including Bitcoin, Ethereum, XRP, Bitcoin Cash, EOS, Stellar and more. If you are looking for a wallet that can store more than your Bitcoins, Ledger Nano is a good choice.
#2. Trezor Hardware Wallets
Trezor allows you to store more than 1000 coins. It works well with Windows, macOS, Linux. The connection is via a USB port, control is via an OLED display. Among the useful additions are backup and the ability to remotely erase data, which is especially useful in case of losing a wallet. The shape of the Trezor device resembles a keychain. It connects to a computer using a USB port.
Trezor launches 2 wallet models: One and Model T, priced at 69 and 149 euros, respectively.
Benefits of Trezor:
The connection to the computer is limited. So that only signals marked by the random number generator of the device are passed on both sides;
Support TOP 10 coins;
Trezor Wallet vs Ledger Nano Wallet
Ledger Nano S
#3. KeepKey Hardware Wallet
KeepKey Cold Hardware Wallet is one of the youngest in the ranking. In terms of size, it is the largest, so you can’t put one in your pocket.
Its protection does not differ from alternatives. Pin codes and seed phrases are also used. In addition, each transaction will need to be confirmed on the screen. The wallet supports 6 currencies. The price of such a wallet is around $100.
#4. CoolWallet S Hardware Wallet
CoolWallet S is the only cold wallet for mobile devices that looks like a thin bank card and uses Bluetooth encryption technology to wirelessly connect to a mobile gadget. It works quickly and safely with the phone. You just need to download the application and synchronize the wallet with it.
For secure storage, the Secure Element microchip with EAL5+ certificate is used. The wallet is compatible with iOS and Android. The price is $189.
How to Protect a Hardware Wallet?
In order to provide a greater level of protection for your wallet, you should be guided by the following tips:
Do not share data on how much cryptocurrency is stored on the wallet, how and where.
It’s worth using passwords such as multi-signatures.
You should create copies of private keys, encrypt them and store them in several places.
Use as much protection as possible to increase the level of wallet protection (complex passwords, two-factor authentication).
You should not follow suspicious links unknown by anyone from the computer that stores your funds.