Ledger Nano S Review 2021
Meanwhile there is a follow-up of this model. Look here to learn more about it: Ledger Nano X
- 1 First Impression
- 2 Setting Up the Ledger Nano S
- 3 Ledger Nano S Handling
- 4 Supported Devices and Currencies
- 5 Documentation and Support
- 6 Security Aspects of the Ledger Nano S
The Ledger Nano S together with TREZOR, is one of the most popular hardware wallets on the market. Only 2014 founded, Ledger has already sold over a million devices in over 160 countries.
I bought the Nano S in the Ledger online shop. In the following I will take a close look at everything from unpacking to completing the first transaction. There are many helpful tips and comments.
At the beginning of each hardware wallet is the purchase in an online shop. Until now, hardware wallets have been available almost exclusively on the Internet.
The webshop of Ledger is very clearly structured and all prices are issued directly in euros including taxes. This results in a price of 59,00 € (click here to check the current price) for the ledger Nano S at the time of testing. In addition to Bitcoin, credit cards and PayPal are also accepted as payment methods. There have also been different colours to choose from since mid-November. Since the beginning of 2018, shipping is free of charge in almost all countries of the world.
Of course, the Ledger Nano S can also be ordered via one of the official retailers. These are in close contact with ledger and take care of the respective distribution in your country.
Hardware Wallets should preferably be ordered directly from the manufacturer or official resellers.
Dubious shops or private sellers on platforms like ebay or amazon could manipulate the devices for their own purposes or trick the buyer. This way the thieves can steal all coins from your hardware wallet at a later date. Unfortunately there have been such cases in the past
Contents of the Package
Once you have completed your order and waited patiently for your package, you are about to unpack.
The Ledger Nano S is packed in a small, very high quality, white packaging. It is very similar to the packaging of Apple products, which also rely on such a grey and white style.
On one side, the packaging is protected by a seal, and the packaging can be opened without breaking this seal. But do not worry this is intended because the Ledger Nano S is also protected from firmware modifications on the software side.
A conventional seal, which is supposed to securely seal the packaging, induces deceptive security. It is possible that for example, the packaging was replaced after modifying the hardware wallet or that the seals could be opened by a special process without breaking.
Scope of Delivery for the Ledger Nano S
If you open the carton now, the Ledger Nano S lights up directly towards you, which is protected in a shock-proof foam. The display, buttons and USB connection are protected by an aluminium cover, similar to that of some USB sticks. On the one hand, the company name “Ledger” is engraved, on the other hand the sentence “vires in Numero”, which is Latin for “strength by Numbers”.
In the second level of the package you will find a small folder with the “Getting Started” manual and a pre-printed form for the recovery seed On this one, the 24 words are later written down which represent the access to all your cryptocurrencies.
In addition, bands and rings are available to carry the hardware wallet around the neck or keychain. And of course there is the USB to micro-USB cable to connect the Hardware Wallet to a computer. For the connection with an android smartphone a special OTG adapter is needed, which you can also purchase in the ledger shop.
First Impression: Conclusion
The order is already very inviting due to the various shipping and payment methods in the Ledger shop. Overall, the content is extensive and well manufactured. Especially the Ledger Nano S stands out due to its aluminium casing.
Setting Up the Ledger Nano S
Never use a hardware wallet that is already set up. You must choose your own PIN code or password and perform the backup yourself. This is not given by anyone!
The hardware wallet is now unpacked. But until you can really manage your cryptocurrencies, you still need a short setup.
The enclosed “Getting Started” card gives you a hint of the right way: Visit the website start.ledgerwallet.com. Here you will be directed to the latest software from Ledger, Ledger Live.
Ledger Live was released in July 2018 by ledger and is the new software counterpart to the ledger hardware wallets. This software allows you to set up any ledger hardware wallet, but also to manage all cryptocurrencies later. The cumbersome way of using different chrome extensions is a part of the past.
The software can be downloaded from the ledger page. It is compatible with both Mac, Windows and Linux – a mobile version for Android and iOS is already in the works.
After installation the software opens automatically and you can start the setup via the button “Get Started”. There are now several options available:
- setting up a new device
- restoring an old device with the help of recovery seed
- use a device that is already set up
- buy a Hardware Wallet from ledger
For a new setup you choose the first option. Then you will be asked for the exact model you would like to set up. After clicking on the Ledger Nano S you will be guided through the setup process. The software only displays support tips and hints, but the setup is completely detached only at the hardware wallet itself.
Connecting and Short Instruction
The first thing you do is connect your Ledger Nano S to a computer using the supplied USB cable. If you are very concerned about your safety, you can alternatively connect the Ledger Nano S with an adapter directly to the socket or use a power bank. No matter how you supply the Ledger Nano S with power, now we continue with the setup.
First, the use of the two buttons is explained: a simultaneous pressing of both buttons is equal to an “OK”. Scroll through lists by pressing the left and right buttons. After pressing both keys for confirmation, the configuration is started.
At the beginning you will be asked once again whether you want to configure the device as a new device or if you want to use your already created recovery seed to restore an old wallet. Since there is no recovery seed yet, the device is reconfigured using the right button.
Set PIN Code
You will now be asked to specify a PIN code. This secures the hardware wallet from unauthorized use by asking for it every time the device is switched on. This must be entered twice to exclude a typo.
You can assign up to eight digits, where four is the minimum. You can delete a character by selecting the “delete” symbol below the 0.
Create the Recovery Seed
Then you are asked to write the backup (“Recovery Seed”) in the form of 24 words on the provided sheet in the scope of delivery.
Your recovery seed is the backup key to all your crypto currencies and applications. The recovery seed (backup) can only be displayed once. Never make a digital copy of it and never upload it online. Keep the recovery seed in a safe place, in the best case also safe from fire and water. Special backup products such as Cryptosteel Capsule or Billfodl are suitable for this.
No one but yourself can be held liable for financial losses caused by improper handling of sensitive data.
With the help of this key you can restore the cryptocurrencies of the hardware wallet to any Ledger device, but also to other software, online or hardware wallets. For maximum security, it is recommended that you write down the recovery seed one more time and store it in a second place, for example in a bank or at friends or relatives. But remember that everyone who has access to this sheet also has access to your cryptocurrencies.
If you have written down the last word, you have to press both keys for confirmation.
Then, with the latest firmware version, all words are checked again to ensure that they have been correctly noted. This is an important step, as the Recovery Seed is the key to the coins and must be noted. This way you can exclude possible careless errors, for example by a forgotten word.
The hardware wallet is now ready. However, Ledger Live still requests to go through a security checklist.
Here you will be asked if you really chose the PIN and the recovery seed yourself. Finally, a verification of the authenticity of the hardware wallet follows. For this purpose, Ledger Live directly accesses your Ledger Nano S, which is why the action on the hardware wallet must be confirmed. This step is to exclude the fact that a compromised hardware wallet has been obtained from fraudsters. Only a real Ledger device can provide the cryptographic evidence required to connect to the secure server of Ledger. This process may take a few moments.
Ledger Live Password and Analysis
Choose an optional password that will unlock the application to protect your privacy. Only those who have the password can see the current status of the portfolio. This functionality is especially useful when using a shared computer.
If you forget the password, the software Ledger Live must be reseted. Forgetting has no effect on your cryptocurrencies, but the software needs to be reconfigured.
Finally, you can send Ledger voluntarily extended anonymous data on the usage behavior to further improve the software. Then you can start the software.
Manage Cryptocurrencies with Ledger Live
After setup, you can start adding accounts for different cryptocurrencies to Ledger Live. These behave like bank accounts through which you can send and receive the corresponding currencies.
However, before you can add the accounts you need, you need also the app for the corresponding cryptocurrencies on the hardware wallet itself. In the delivery state, some apps for cryptocurrencies are already pre-installed in addition to the settings app.
Ledger Nano S Apps
To manage the apps, you open the tab “Manager” in Ledger Live.
Here you will find a list of all available apps that can be installed and deleted from here. Besides the apps for all known cryptocurrencies like Bitcoin or Ethereum there are many more apps for lesser known coins. There are also apps for other areas that use the cryptography of the device. For example, there is an SSH agent or an app to check the recovery seed.
App for the Fido U2F Standard
There is also an app called Fido U2F. With the Fido U2F standard you can use your Ledger Nano S as a second factor when logging in to different services.
If you make your device known to your Google account, for example, when you sign up for untrusted devices, you must also always connect the hardware wallet to your computer in addition to your password. This is supposed to make it harder for hackers to log in with your accounts.
App Limit Note
For a long time only about five apps could be installed at the same time on the Ledger Nano S due to the low storage space, but sometimes also more. This place depended on which apps are installed and also in what order.
Since March 2018 with the latest firmware version it may be possible to install a lot more apps on the Nano S. Because many cryptocurrencies are forks of Bitcoin, which also resembles large portions of the code of the apps of these forks. Ledger has therefore placed this common code base in the Bitcoin app, which greatly reduces the size of the other apps. Using this principle, it is possible to install up to 18 applications that share this library. However, if applications are installed with a completely different codebase (e.g. Bitcoin, Ethereum, Ripple, Fido U2F, password manager), you are still limited to 4 or 5 applications.
In summary, depending on the type of applications installed, a different result can be achieved. Most likely you will be able to install approximately 10 apps. However, you can still manage all your apps by not having all of them installed at the same time. Simply uninstall and install apps from the Ledger manager If you want to use them. These steps only take a few seconds.
So don’t worry: even if you uninstall an application, you won’t lose your coins. Because the seed remains intact. If this is too uncomfortable for you, you can of course also handle the whole thing with a second Ledger Nano S. Or you decide on the Hardware Wallet Ledger Blue. The problem has been identified and the Ledger Blue has been allocated about 50% more memory.
|Ledger Nano S||320 kilobytes||10 kilobytes|
|Ledger Blue||480 kilobytes||12 kilobytes|
All values has not yet been calculated with the operating system of ledger. This effectively reduces the amount of space for apps on the devices. The Ledger Blue provides space for eight to 10 apps with different code base.
If the app is available on the hardware wallet, you are now also able to add this coin account to Ledger Live. Just click on the plus symbol for accounts and follow the dialogue. The added accounts will then appear listed in the menu bar, but are also clearly summarized on the portfolio page.
You can now make transactions on any computer that has Ledger Live installed. No matter if it is infected with viruses and malware or is on a public network. The transactions are verified by the hardware wallet and validated by the display and the buttons by you.
It is easy to set up, because the Ledger Live software guides you through the process. The only point of criticism is the app management, because you first have to install the corresponding app for the desired cryptocurrency before you can start. In addition, the number of apps is also limited.
This way of building, however, also offers developers the opportunity to create unique apps. Each user of a Ledger hardware wallet benefits from this in the long run.
Ledger Nano S Handling
The hardware wallet is now configured and secured. The following test section shows how the Ledger Nano S has proven itself in my everyday life. At the beginning, the most important function is examined: Performing a simple transaction.
Performing a Transaction
Transaction can be carried out with various software wallets that support Ledger. Of course, the software Ledger Live is optimally designed for Ledger Nano S. Here you can send and receive any supported cryptocurrency via the “Send” and “Receive” tabs.
Clicking on the button “receive” opens a small window which leads you through the process.
The first thing to do is select the account that will receive the coins. Then you open the corresponding app on the device and confirm the address. Clicking on the button will display the address on both the hardware wallet and the PC display. Only if the two addresses match, you should send your Bitcoins to that address. Otherwise, your computer might be hacked and the displayed address will be manipulated on your monitor.
You now have the possibility to copy the address or to scan with the help of the QR code. You can also print the address or send it by e-mail.
To send cryptocurrencies, click on the “Send” tab. As with receiving, you now select the account you would like to debit and then specify both the recipient and the amount. The fees can also be set here. Clicking “Continue” will send the address to the hardware wallet for verification.
The hardware wallet now shows the entire transaction including fees.
The right button then finally verifies the transaction directly on the device, which means that the private keys never come into contact with the PC.
General Operation of the Ledger Nano S
As already mentioned, the operation on the hardware wallet Ledger Nano S itself is very simple and straightforward:
You scroll through lists and menus by clicking a button at the moment. You can trigger confirmations or make a selection by pressing both buttons simultaneously. This works without delay and is very reliable.
The only point of criticism here is the entry of the recovery seed, which usually takes a very long time. Because using only two buttons to scroll through the alphabet can be nerve-wracking. It is enough to enter the first 2-5 letters of each word and then scroll through a list of words, but this requires a lot of patience.
However, since this is very rare, it is not too painful. Moreover, this method has the big advantage that the seed can be typed directly on the device and one is so safe from keyloggers.
Turning off the Ledger Nano S
A bit of getting used to is the end and shutdown of the hardware wallet Ledger Nano S: Just disconnect the cable and make the device powerless.
Everyday use is possible with the Ledger Nano S hardware wallet without any circumstances. The software provided by Ledger provides all the basic options and the operation via the two buttons is quick and easy. In summary, I can say that it is very easy to carry out a transaction. The additional push of a button on the device is not a major limitation, but it ensures a high degree of safety.
Supported Devices and Currencies
According to Ledger, the Ledger Nano S is compatible with almost all operating systems.
- Chrome OS
Ledger’s hardware wallets are clearly ahead when it comes to supported cryptocurrencies. New cryptocurrencies are implemented on a regular basis, both for the hardware wallet Ledger Blue and for the Ledger Nano S. Currently the following cryptocurrencies are supported:
- FIC Network
- POA network
- Bitcoin Private
- Bitcoin Gold
- Bitcoin Cash
- Ethereum Classic
- ERC-20 Tokens
A complete list together with the corresponding software wallet can always be found on the website of the manufacturer: Ledger Nano S Cryptocurrencies.
The only interface is the USB port. With the Ledger Nano S It is therefore not possible to make transactions wirelessly. However, using a OTG cable , you can also use the android smartphone to verify compatible apps such as GreenBits transactions. IPhones have the slightly more limited operating system iOS installed, which unfortunately can not handle USB devices. As an alternative, you can use the watch-only function of its hardware wallet and install an app that only monitors the wallet and cannot make any transactions.
The Ledger Nano S supports, among other things, the following third-party wallets and services:
- Ledger Wallet Bitcoin
- Ledger Password Manager
- Ledger Wallet Ethereum
The Ledger Nano S is available for mobile (Android) as well as for the desktop computer. It also offers numerous other possibilities, such as compatibility with exchanges such as Bitstamp or the use as a universal second factor.
Documentation and Support
As already described, there is no instruction manual but only a quick Start guide for the setup. Ledger offers a comprehensive online documentation for its hardware wallets. This is constantly updated and expanded and gives answers to almost every question.
If questions remain open, you can contact the Ledger Support directly. This takes place primarily in writing via the support platform Zendesk. Just visit the contact page of the Ledger homepage and open a ticket. If you want, you can get to know a part of the team personally and visit the official shop in Paris. Unfortunately, the response times are sometimes very long, as the demand for Ledger hardware wallets has increased dramatically. Both documentation and support are preferably held in English.
In the event of a defect or malfunction and if the device was purchased directly from www.ledgerwallet.com and not by a reseller, the device will be exchanged free of charge after requesting an RMA number from the support team.
Security Aspects of the Ledger Nano S
The BOLOS Platform
The Ledger Nano S is built around the BOLOS platform. BOLOS stands for Blockchain Open Ledger Operating System and is a development of Ledger to give every developer in the world the opportunity to write apps for Ledger devices. You can use the secure features of the hardware wallet without causing any damage, as each app runs in complete isolation.
BOLOS is a way of turning hardware wallets into personal security devices. Users can install third-party applications that add new privacy features through their own common set of cryptographic material without actually being able to read this material.
Each time the power is turned on, you must enter the Pin, which can consist of four to eight digits.
In the settings you can also adjust that the number of the set is always changed and that it is not possible to read the Pin by the finger movement of third parties.
It is also possible to automatically lock the wallet after a few minutes with the current firmware. Manually you can lock the hardware wallet at any time by holding down both buttons for three seconds.
If you set the pin incorrectly three times, the Ledger Nano S is reseted. To restore its addresses you need the recovery seed now.
The Recovery Seed
The Ledger Nano S always creates a recovery seed in formof 24 words. In case of theft or damage you can restore your wallets with a compatible hardware or software wallet with the help of the recovery seed.
With a Ledger Nano S you can recover a recovery seed consisting of 12, 18 or 24 words, for example also of competing products such as TREZOR or Keepkey. That worked out in the tests without any problems. It is recommended to always test it at the beginning, as long as you have only a few Bitcoins on the device.
A transaction is always validated via the display and the buttons, so that a forgery of the transaction can be excluded by malware on the computer.
Setting up the wallet can also be done separately from a computer, so that no one can assign the IP address to this wallet. After the setup you can use another private wallet software like Electrum.
Encryption by passphrase further increases security by using additional passwords at startup.
The passphrase option allows you to open multiple hidden wallets. Each passphrase opens a new, independent wallet based on your seed. This gives you the possibility of a plausible deniability ("PLAUSIBLE DENIABILITY") in case of blackmail, because the Recovery Seed only opens the first wallet. Activate this option only if you really understand it to not lose access to your coins!
You should use passphrase encryption mainly for two reasons:
- If someone gets access to your 24 recovery key, the game is actually over. However, if there is an additional password, you will not be approached to the original account without it.
- In case of blackmail, you can give out a wrong password with only a little deposited money.
Entering the password every time the Ledger Nano S is started would be very impractical. Therefore, you link the password with another pin, which you can enter in place of the normal pin at startup. This gives you a second access that applies to all cryptocurrencies. Imaginable is a wallet for everyday use and a hidden one for savings deposits.
In contrast to the biggest competitor TREZOR, the firmware is not open source because of a non-disclosure agreement with a security chip manufacturer, only the software is open source.
However, the specifications are fully exposed and all cryptographic operations are deterministic. This means that every user can check whether the card answers, what it should do and if there is no side channel. This approach is widely used in the smart card industry and is generally used to obtain security certificates for bank and identity products.
FAQ 23Ask your own question
That is not a problem. You can restore your accounts to a new hardware wallet using the recovery key you wrote down when you set it up.
If you already own a Ledger Nano S and want to switch to the successor, you don’t have to throw away the Nano S. It is very possible to operate both in parallel. For this reason, Ledger continues to sell both models together as a “backup pack”. You can easily use the same recovery phrase for both. In this case, both hardware wallets can be used interchangeably with Ledger Live. For example, you then take the Ledger Nano S for use at home or as a backup device safely stowed and the Nano X for on the go. Both then operate the same wallet. Of course, you can also generate a new wallet and send your cryptocurrencies to the new wallet.
There are two ways to reset the Ledger Nano S to factory settings.
Reset from device settings
- Connect and unlock the Ledger Nano S by entering the PIN code.
- Go to the settings on the dashboard and press both buttons to confirm.
- Select “Security” and press both buttons for confirmation.
- Select “Reset all” by pressing both buttons.
- Accept the warning by pressing the right button to continue.
- Press both buttons to reset them all.
- Enter your PIN code for confirmation. Your device will then be reset.
Reset from PIN code
- Connect the USB cable to the Ledger Nano S to turn it on.
- Enter an incorrect PIN code three times in a row.
- The device is reset as a security measure after the third incorrect attempt.
There is no risk of using a Thunderbolt 3 port to use the Nano S.
The Ledger Live application can be used with multiple ledger devices. If the different devices have the same recovery seed, they can be used easily interchangeable. If the devices have different seeds, the appropriate hardware wallet must always be connected in order to be able to make transactions with the account.
Occasionally, users may report that their Nano S will stop working for some reason during firmware updates and will be stuck in Update. The following can help with this problem:
The server processes the request for the update in a queue. The best thing is to wait when nothing seems to move. If it fails, just try again. It will be updated at some point. Just be patient. Especially in the first few days, the servers can be very congested.
Repeat the step
- stop Ledger Manager and restart it
- disconnect the Ledger Nano S
- reconnect and unlock by entering your PIN code
- the process should start over again
If you’re working on Windows and have problems:
- Open Device Manager (in Control Panel).
- Locate the USB device with a yellow warning sign and right-click “Update Driver”.
- After the driver is updated, you can open the Ledger Manager, connect the device, and wait.
On other systems (Mac/Linux), the only solution is to try again.
repair the Ledger Nano S
If none of this helps, use the device repair tool in Ledger Live.
- Open Ledger Live
On Windows: Right-click Ledger Live and run it as administrator .
- Open the device repair tool by going to the manager and waiting for the blue “Repair” button, or open it directly via: Settings > Help > Repair your Ledger device.
- Connect the Ledger Nano S
- In Ledger Live, select “Follow device repair instructions” and click repair. The repair process starts.
Bitcoin SV (Bitcoin Satoshi Vision, or BSV) is a cryptocurrency formed on November 15, 2018 by a hard fork from Bitcoin Cash. Bitcoin Satoshi Vision is the fourth largest cryptocurrency and has thus overtaken Bitcoin Cash (Source: Wikipedia).
Users who have secured their Bitcoin cash before the hard fork with a ledger hardware wallet automatically own the same amount of BSV as BCH.
BSV is not supported in Ledger Live. Instead, users can manage their BSV using the Bitcoin Cash app on their ledger device in conjunction with Electrum SV, as described below: https://electrumsv.io/.
If you buy cryptocurrencies through Coinbase and store them there, Coinbase is in possession of your private keys and could theoretically disappear with your cryptocurrencies at any time.
Therefore, it is recommended not to keep the coins on exchanges, but to transfer them to wallets, where one is the only one in possession of the private keys.
You should therefore consider sending the coins from your Coinbase Wallet to your Ledger Wallet. For a possible later sale, you can simply send the coins from the hardware wallet back to Coinbase.
This is how you transfer coins from Coinbase to your hardware wallet
- Generate a new address from your hardware wallet. For example, open the Ledger Live software and select the “Receive” option for the corresponding account. Copy the displayed address to your cache.
- In Coinbase, you now navigate to your portfolio page and select the appropriate wallet from which you want to send.
- In the Send dialog box, select the wallet address option because you want to send to a wallet outside of Coinbase. Copy the address of the hardware wallet to the appropriate field.
- Enter the amount of cryptocurrency you want to send into the Amount field.
- Select Next and confirm the transaction details to complete the sending. Make sure that the address matches the one copied from the hardware wallet
Install the Stellar app on the ledger device to manage Stellar (XLM) with the Stellar Account Viewer or StellarTerm. The Stellar app is developed by the Stellar community. To manage the transactions you have to use the Stellar Account Viewer, because Ledger Live does not currently support this cryptocurrency itself.
The IOTA Foundation announced on November 2, 2018 that Ledger hardware wallets now support the storage of IOTA tokens.
To do this, the IOTA app must be installed on the Ledger hardware wallet to manage MIOTA with the official Trinity wallet. The IOTA app is developed and supported by the IOTA community. How to use your ledger with the Trinity Wallet is described on their website: https://trinity.iota.org/hardware.
You can easily install Ledger Live on a new computer and link your old hardware wallet again. Ledger Live is just the interface for managing cryptocurrencies All necessary keys are on the hardware wallet itself.
Ledger Live provides the ability to change the language. The language settings of the hardware wallet itself cannot be changed. There, the menu and all settings are only available in English. The same applies to documentation and support.
Most wallets support more than just one cryptocurrency, but only generate one backup. Nevertheless, this one backup is sufficient to restore all cryptocurrencies as all private keys of the different wallets result from the seed that is backed up as a backup during setup.
Ledger hardware wallets (Ledger Nano S or Ledger Nano X) support over 100 different cryptocurrencies. Among them are all the well-known coins like Bitcoin, Ethereum or Ripple. A complete overview can be found here:Ledger supported cryptocurrencies.
In principle, as many supported coins/cryptocurrencies can be stored on the Ledger Nano S as you like. The hardware wallet only stores the private keys that ensure access to the coins. To manage the coins, the corresponding app must be installed on the device.
However, you can only install a certain number of apps at a time on the Ledger Nano S or Nano X. This is because the memory of the Ledger Nano S and Nano X is limited. However, it is not a problem to switch apps by un- and install, so the coins are not lost.
The safest option is to buy the hardware wallet Ledger Nano S directly from the manufacturer. This reduces the risk of manipulation. It can be ordered worldwide here: Ledger Shop.
The hardware wallet Ledger Nano X is the successor to the bestseller Ledger Nano S. Both are subject to the same high security standards and are both managed with the Ledger Live software. However, the Nano X ledger can offer some improvements, including:
- more storage space for more than 100 apps instead of 3 to 20 for Ledger Nano S
- Bluetooth and battery allow use on the go
- USB-C port
Those who can do without the new features are still well advised with the Ledger Nano S A backup pack with both hardware wallets is also recommended: the Ledger Nano X for on the go and the Nano S as a backup for safe storage at home.
All the differences can be found here: Ledger Nano X vs Ledger Nano S.
Hardware Wallets such as the Ledger Nano X, TREZOR Model T, BitBox02 or KeepKey all work according to the same principle. They are a special form of a so-called wallet, which is used to manage cryptocurrencies. A hardware wallet is a physical device that securely and inisolationly generates the private keys to the cryptocurrencies. Due to the extra hardware, they have some advantages over software wallets:
- Private keys are often stored in a protected area of a microcontroller and cannot be transferred out of the device in clear text.
- Hardware wallets are immune to computer viruses that steal from software wallets.
- They can be used securely and interactively, private keys never need to come into contact with potentially vulnerable software.
- The software is in most cases open source, so that the user or professionals can validate the entire operation of the device.
However, it is important to understand that hardware wallets are an attractive target for attackers and depend on several assumptions to maintain security. They are not a miracle weapon, and there are several realistic ways to hack a hardware wallet Especially if someone has physical access to the device.
Can I restore the recovery seed of the TREZOR Model T with a newly purchased Ledger hardware wallet?
The hardware wallet TREZOR Model T generates a 12 word recovery seed in conjunction with the TREZOR Wallet. This is a generally accepted standard that is also supported by ledger hardware wallets. This allows you to use an existing recovery seed from TREZOR for all hardware wallets of ledgers such as the Ledger Nano X or the Nano S at the setup. This gives you access to all your accounts that were originally created with the TREZOR Model T via the Ledger hardware wallet
A new cryptocurrency is rarely supported directly by a hardware wallet at the beginning. However, most providers such as Ledger or TREZOR are constantly working to support new cryptocurrencies. Therefore, it is often worth waiting until the desired currency is supported by your hardware wallet.
I would like to give a hardware wallet as a birth gift. Do I need this every time I want to deposit coins or is there another way?
No, you don’t need the hardware wallet every time you want to make a deposit. It is only necessary to set up the hardware wallet and generate an address of the corresponding cryptocurrency.
Cryptocurrency can now be sent to this address on the desired cycle on a regular basis without the need for the hardware wallet. The address does not expire.
Setting up a Ledger hardware wallet is done in 4 simple steps.
- Download Ledger Live to begin the setup process. This is also where cryptocurrencies will later be managed.
- Select PIN code write down the recovery seed – the 24-word recovery seed is the only backup of the private key. Never give it to anyone else!
- Installing applications on the hardware wallet via Ledger Live, for example the Bitcoin application.
- Adding an account to manage cryptocurrencies.
The complete setup process for all models is clearly explained with videos here: Ledger Getting Started.
Are my cryptocurrencies stored in the hardware wallet, or where exactly are they? This is a very good question because the answer defines what your wallet actually needs to protect.
Cryptocurrencies are so named because they are secured by cryptography. For this you need a set of digital keys, for example your (very secret) private key. With this key you can encrypt and digitally sign things.
Let’s take Bitcoin as an example (other cryptocurrencies work in a similar way). The entire Bitcoin network is kept up to date by a common data structure called the blockchain. It contains records of all transactions ever made and is publicly accessible online, so anyone can read it. When you receive some bitcoins, say 0.1 BTC, you see them in your bitcoin wallet, listed under a bitcoin address.
At the same time, the bitcoins are not actually stored in the wallet, they are just an entry in the public blockchain. What the wallet stores is your secret private key that belongs to that address. Since you control that private key, you can spend those Bitcoins again: that’s how “Bitcoin ownership” is defined. Anyone can see these bitcoins, but only you can spend it, so they are yours. But that also means that *anyone* with the right private key can spend those bitcoins. Therefore, it is very important to keep this key secret.
What stops the manufacturer of your hardware from using a backdoor and simply stealing your cryptocurrencies? How much do you have to trust hardware wallet manufacturers?
While a completely “trustless” solution is probably not possible, manufacturers are doing everything they can to minimize the need to trust them.
Most of the software code of many hardware waller manufacturers is open source, i.e. publicly available. Anyone can check how the device works and how secrets are handled. Of course, not everyone has the ability to review code: that’s why independent researchers are often encouraged to analyze, and are often rewarded by bug bounty programs when they find something. This does not limit their ability to publish a full independent report without permission.
The essentials to go: A wallet manages your secret private keys and requires full access to them. You can and should demand full transparency about how a wallet works and ensure that independent public audits are encouraged.
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|Compatibility||Ledger Wallet Bitcoin, woleet, OpenPGP, Ledger Password Manager, Ledger Wallet Ethereum, Mycelium, Copay, Electrum, MyEtherWallet, GreenBits, BitGo, FIDO/U2F, Bitstamp|
|Cryptocurrencies||Bitcoin, Monero, Cardano, Vechain, Icon, Stealth, Woleet, Wanchain, Kowala, Particl, Rootstock, Waves, Rise, FIC Network, EOS, POA network, IOTA, Lisk, Musicoin, Factom, Gamecredits, MIX, ethergem, Nano, Nimiq, Peercoin, Zcoin, Tron, Ontology, Hycon, Pirl, Akroma, Bitcoin Private, ZenCash, NEO, Bitcoin Gold, Stellar, Hcash, DigiByte, Qtum, PivX, Vertcoin, Viacoin, Expanse, Ethereum, Litecoin, Dogecoin, Zcash, Dash, Stratis, Ripple, Komodo, Bitcoin Cash, Ethereum Classic, ERC-20 Tokens, PoSW, ARK|
|Platform||Windows, Linux, Mac, Android, Chrome OS|
|FIDO U2F Authenticator|
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