What is a Bitcoin Hardware Wallet?

What is a Bitcoin Hardware Wallet?

What is a Bitcoin hardware wallet?

A bitcoin hardware wallet is simply software that stores bitcoin. It can be connected to your computer through USB. It’s called a bitcoin hardware wallet because the device is a small mobile phone or USB key.  

It’s one of the most secure ways to store your bitcoins since the software isn’t connected to the internet. That prevents anybody who might try to gain access to your bitcoins.

In a bitcoin hardware wallet, your information is not stored in a system with an internet connection. If there’s an internet connection, people might be able to hack into the system. But a bitcoin hardware wallet can’t be broken into unless someone steals it from you.

So in this guide, we’re gonna discuss the three best bitcoin hardware wallet that are available in the market in order to help you determine which one is best for you!

Ledger, the Bitcoin Hardware Wallet pioneer.

Ledger is a company that was started with the aim to make bitcoin transactions for everybody as safe as possible. Inside the Ledger Nano S or the Ledger Blue, there’s a secure element which makes sure that the bitcoin hardware wallet is unhackable. It’s like the secure element in your sim or your credit card. The company’s founders come from security backgrounds, in the field of smart-cards and secure embedded OS. So it’s a company that people trust because of the many security services it provides.

Security

All Ledger devices provide two factor authentication, with Gmail and other applications. Two factor authentication is essentially similar to adding a layer of security when you pay with your bank details over the internet. If you were to give your bank your phone number, when you try to pay for something online, the bank can send you a text with a code that can verify the transaction. You can do the same thing for some Ledger devices but with compatible applications such as Gmail or you can verify the transaction by manually pressing a button on the device.

The security on both the Nano S and the Blueis exceptional since you need a PIN to access the bitcoin hardware wallet in the first place. If this PIN is entered incorrectly three times, all of the memory is wiped and the bitcoin hardware wallet becomes useless. So even if someone steals the physical bitcoin hardware wallet, they cannot make any use of your bitcoins.

Now let’s imagine someone like me puts in the PIN wrong three times, how do I get my coins back? During the initialization of the Ledger Wallet, a passphrase consisting of 24 random words is provided. This passphrase can be used to recover your device if stolen, lost or damaged. So you really don’t need to worry about carrying it on you all the time, only you know your PIN.

Nano S

The Ledger Nano S is one of the best bitcoin hardware wallets available today, and it has been one of the most popular during the growth of bitcoin. It’s like a small USB key which has two buttons on the sides, and it has a small embedded OLED display. You can connect it to your computer directly and carry out any transactions you might want to do. As we discussed above, the Ledger Nano S is completely secure, providing top of the line security services and regular integrity checks.

The device has a manual two factor authentication method.

There’s two buttons on the sides of the Nano S. You press at the same time in order to verify a transaction. Therefore, if your computer tries to pass a fraudulent transaction, it will show it to you on the screen of the USB key. So, you can avoid the transaction from taking place by not pressing the two buttons. This is pretty amazing because even if your computer is compromised, the Nano S will not let go of your bitcoins.

Blue

The Ledger Blue is like the elder brother of the Nano S, the company calls it “the most advanced hardware security gear on the market”. The bitcoin hardware wallet itself is almost as big as an iPhone, it has a wide display and boasts enterprise level crypto-capabilities into a lightweight device. It also has a secure element, similar to the Nano S, and features a touch screen, WiFi and Bluetooth connectivity.

The Ledger Blue is the latest generation of bitcoin hardware wallets which now have many more features than before. The device can download different applications that you might need for the storage of other digital currencies as well. The Ledger Blue supports Bitcoin, Ethereum, Ethereum Classic, Ripple, Dash, Dogecoin, ZCash, Stratis and Komodo. That’s a very long list and most people won’t buy anything more than a bitcoin. So it’s a bitcoin hardware wallet that I believe is made for professionals, it costs $312 compared to $65 for the Nano S.

Trezor

Trezor is Ledger’s main competitor. It’s a bitcoin hardware wallet that helps people to securely store their bitcoins. It also helps people maintain security in some aspects of life on the internet. It’s also an extremely helpful device that has great privacy services that everybody can benefit from.

So firstly, we can discuss the cryptocurrency aspect of Trezor. It works just like Ledger Nano or Blue, it uses a similar secure element which keeps you currency safe. It also has a two factor authentication like the Ledger devices, which keeps your bitcoin hardware wallet secure. The Trezor device supports three currencies; Bitcoin, ZCash and Dash.

Apart from the cryptocurrency aspect, Trezor also boasts to be a secure password manager for every user. The password manager encrypts your password and provides a dashboard where you can access all of the passwords at once. Trezor is one of the most secure ways to save your passwords. The issue with having one password everywhere is that if someone has that master password, they have access to every account that you have.

The company boasts ‘TREZOR Password Manager doesn’t require a master password. Instead, your TREZOR is the master key to your passwords.’

What’s the best one?

Well, that’s for you to judge. If you require company level encryption and have a higher budget, you can go for the Ledger Blue. But otherwise, both the Nano S and the Trezor are great bitcoin hardware wallets over all. I believe Trezor is the best one on the market, because the company is based on general security and the team has great experience in working in online security.

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About Article Author

Martina Kelowsky
Martina Kelowsky

Currently working on her Master Degree in Economics & Computer Science she lives in Russia. She is a Bitcoin Enthusiast since 2013 and Investor in various ICO since 2014. She aims to democratize a future where money is decentralized and transaction anonymous.

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