Best Hardware Wallets in 2018 for Storing Crypto | A Detailed Review
Despite all the security benefits of blockchain technology, the storage of cryptographic assets is still an area that is highly susceptible to hacks. As such, it is important to ensure that your newly created wealth is stored somewhere that is safe and secure. Due to numerous hacks in the past (cue Mt. Gox $460m exchange hack back in ’14), it is not recommended to leave crypto on exchanges. Although, some day traders do leave small amounts on exchanges for liquidity purposes.
Conversely, the safest and most secure way to store your crypto is with a hardware wallet, which is a small USB type device that plugs into your computer, relying on their own software or 3rd party applications in order to function and manage funds. This type of ‘cold storage’ is offline and therefore is a lot safer from remote attacks by hackers. There are a number of different options on the market that vary in terms of features, supported coins, security and price. Based on these factors, we recommend the best hardware wallets for storing cryptocurrency in 2018.
Contents
Trezor Review
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- Check and confirm transactions on the display and confirm with using the physical buttons (anti-malware second factor)
- Your confidential data is never exposed: it is secured inside a strongly isolated environment locked by a PIN code
- Use companion apps such as cryptocurrencies wallets, and also FIDO U2F, GPG, SSH or build your own applications
- Ledger Nano S supports the FIDO Universal Second Factor authentication standard on Google, Dropbox, GitHub or Dashlane
When it comes to hardware wallets, Trezor are the go too for many crypto investors. Likely because they were the first and therefore the oldest, garnering a lot of community support and trust over the years. The device itself is relatively small and plugs into your computer via a USB cable, although it is perhaps not as sleek as the Nano S! In terms of design, the Trezor is intentionally simple and minimalistic, with the company stating this is because they ‘removed everything that could be easily hacked’. It features 2 buttons for navigation and a small display for confirming transactions.
Supported Coins & Usability
But how does the Trezor work? In layman’s terms, when cryptographic transactions are initiated an algorithm needs to be signed for the transaction to be confirmed. However, in order to sign the transaction a special key or password is required. This private key is stored within the Trezor, allowing you to physically confirm transactions safely with the device.
With regard to managing your funds, Trezor have designed their own browser-based wallet which is compatible with Windows, Mac OS and Linux operating systems. This allows you to view your balances, generate receiving addresses and initiate transactions. However, the device is also compatible with a range of other 3rd party wallets if you do not want to use Trezor’s own software. You can find a list of what wallet apps are currently available here.
What we like about the Trezor is that the developers are open and willing to incorporate support for alternative cryptocurrencies to Bitcoin. Currently, the Trezor supports a nice range of cryptos which you can find outlined below. This might not seem like a lot compared to the 1000s of digital assets on offer, but Trezor are always working to improve the product and compatibility, so we can expect more to be added in the future. Check the up to date list here.
- Bitcoin
- Litecoin
- Dash
- Zcash
- Bitcoin Cash
- Bitcoin Gold
- Ethereum and all ERC-20 tokens built on Ethereum network
- Ethereum Classic
- Expanse
- UBIQ
- NEM
- Namecoin
- Dogecoin
- Bitcoin Testnet
Security
One of the most important aspects of any hardware wallet is security and the Trezor has some nice features. Firstly, it makes use of two factor authentication, requiring you to enter a pin as a second layer of security. This means that even if your device is hacked or your Trezor is stolen, your funds should remain safe. You can then restore your wallet contents with a backup phrase that is provided when you first initialize the wallet.
Additionally, the Trezor code is all open-source, with the developers consulting the community before implementing any technical changes. This further enhances the security and transparency of the ecosystem. That said, there are some potential security flaws with the hardware that we discuss in more detail below when we compare it to the Ledger Nano S. Regardless, this is still one of the best hard wallets on the market and a solid choice.
Ledger Nano S Review
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- Ultimate security
- Ease of Use: works on Windows, OS X, and Linux. Plug in the provided USB cable
- Modern Cryptography
- Community driven open-source
Another one of the best hard wallets for cold storage of crypto is the Ledger Nano S. It is similar to the Trezor in a lot of ways, but it is a little more lightweight and looks more like a traditional USB stick. The design is sleek and modern with a brushed metal finish. In terms of functionality, it features two buttons and a small OLED display and operates in much the same way. So, you are probably wondering, what is the difference between the Ledger Nano S and Trezor? Well, for starters it is usually cheaper than the Trezor – unless there is a sale on of course! However, there are several other key differences we have outlined below.
Supported Coins & Usability
The first major point you will want to consider, which may well be the deciding factor between these two similar devices, is what coins the Ledger Nano S supports. At the time of writing, the Ledger Nano S currently supports the widest variety of coins – check them out below. What’s more, you should check for the most up to date list of supported coins here as the team are often adding more!
- Ark,
- Bitcoin,
- Bitcoin Cash,
- Bitcoin Gold,
- Expanse,
- Dash,
- Digibyte,
- Dogecoin,
- Hcash,
- Komodo,
- Litecoin,
- Neo,
- Pivx,
- PoSW,
- Qtum,
- Stealthcoin,
- Stellar,
- Stratis,
- Ubiq,
- Vertcoin,
- Viacoin,
- Ripple
- Zcash.
- Ethereum
- Ethereum Classic
- A selection of ERC20 tokens through My Ether Wallet.
In order to add new coins, you will need to update your device by downloading the relevant App or updating the firmware. Although, you should note that you can only have 5-6 Apps (depending on size) installed at one time, so in order to manage more funds than this you will need to remove/install Apps. This is one of the downsides of the dual chip architecture – more on this below, high security results in a trade off in terms of storage capacity.
The coins are still stored on your wallet if you remove the associated App, but we do think this process is a bit of an inconvenience! That said, there are rumors within the community that Ledger are developing the desktop App to automatically switch between Apps on demand. Similar to Trezor, the code is all open source and can be independently verified, which also allows the community to contribute to development.
Security
Another major difference relates to the hardware within the two devices. The Trezor is basically a mini computer featuring an STMicroelectronics chip, whilst the Ledger Nano S makes use of a dual element chip, which some claim is more secure. This is based off a presentation at DEFCON 25 which found that the Trezor chip is potentially susceptible to fault injection attacks, whereby an attacker can extract data from your device with a special procedure.
However, the attacker would need to physically have the device in order to hack it, plus some of the community claim it is easily avoidable by turning on encryption and adding an additional password. Regardless, Trezor claim to have fixed the issue with their 1.5.2 Firmware update. Whilst it is nice to see a quick resolution from the company, could the device be susceptible to further hacks in the future?
Who can say, but it is this vulnerability that has prevented Trezor from earning a common criteria security certification, whilst the Nano S does have it. This is not to say that Ledger is not without its potential flaws, but they are quite technical and we will not go into them here. If you are interested we suggest you checkout this article.
One of the areas where the Nano S previously fell short of Trezor was that there was no option to add an additional password to further improve security. However, Ledger have recently added an advanced passphrase feature, which allows you to create ‘secret’ wallets. These are accessed with an additional memorized password to go with the standard 24-word passphrase. The advantage of this is that you can set up a main account for day to day usage, as well as one or several secret accounts for storing larger amounts more safely. We really like this new feature and it’s nice to see the development teams of both wallets continuously improving the products.
KeepKey Review
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- Bank-Grade Security that is Simple: KeepKey is the most secure bitcoin wallet available. It makes best-practice bitcoin security easy so that even your grandmother can protect her bitcoin wealth.
- Backup and Recovery: During initialization, you are given the one-time opportunity to write down a backup of your KeepKey in the form of a twelve-word recovery sentence. If your KeepKey is lost or stolen, you can safely recover your device and its bitcoins without compromising the security of your private keys.
The third and final option on our list of the best hardware wallets for storing your cryptocurrency is KeepKey. The company are a relatively new player on the market, which has its pros and cons. Firstly, the KeepKey wallet could be seen as a budget option compared with some of the alternatives. Probably because they are looking to undercut established players to gain market share. That said, the device still has a smart and modern design with a comparatively large OLED display that makes it easier to view and confirm transactions, so it certainly doesn’t look cheap!
Supported Coins & Usability
In terms of usability, the KeepKey is much the same as the above two hardware wallets, relying on a pin code and physical button for confirming transactions. The company have also developed their own wallet application for managing your funds. However, where it falls short compared with the above two is limited support for 3rd party wallet applications, but the code is all open source so you could potentially develop your own firmware.
One of the other disadvantages of this wallet is that there are quite significantly less coins available, with the device currently only supporting a select few of the main coins. You can check for up to date compatibility here. Additionally, despite the Bitcoin Cash fork occurring quite some time ago, BCH support is still only available in the beta client. The development seems pretty slow and it has led to quite a lot of backlash from the community.
- Bitcoin
- Litecoin
- Dogecoin
- Namecoin
- Testnet
- Ethereum
- Dash.
Security
Since the KeepKey shares most of the same features as the Trezor, including the same chip, it is potentially open to the same security weaknesses. It is also a fairly new player on the market so has not earned the reputation and community support of Ledger and Trezor. If a similar hack were to be found as Trezor, would the development team be as fast and effective at responding? For a lot of people this could be a sign that it has not undergone the same rigorous testing process, so might not have been exposed long enough for security flaws to emerge. There is certainly a degree of speculation here, but it is definitely worth considering.
Summary
To conclude, we do not really believe there is a ‘best hardware wallet to rule them all’. What is right for you will ultimately depend on your individual storage needs and budget. Furthermore, due to the differences in supported coins, a lot of investors will own both a Nano S and Trezor. Plus, despite the potential security weaknesses, any hardware wallet is likely going to be a lot safer than hot wallet storage options. So we strongly recommend you read up and get yourself whatever you think is the best hardware wallet out there for your needs. Thanks for reading!
Disclaimer: Readers should do their own research before investing funds in any company, cryptographic asset or piece of equipment. CoinDrift shall not be responsible or liable, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any such content, goods or services mentioned in this article.
