We will walk you through 8 of the best hardware wallets of 2021. Hardware wallets are the safest place for storing your private keys long term.
What are hardware cryptocurrency wallets?
Crypto wallets are an integral part of our use of cryptocurrencies. They are one of the essential elements of infrastructure that make it possible to send and receive funds through blockchain networks. We already mentioned how they work and how many types it has in the article How to Buy Bitcoin. In this post, we’ll look at and focus on the best hardware wallets. As a description, the hardware wallets are a kind of cold wallet.
That means that they are physical, electronic devices that use a random number generator to generate the private keys. After that, keys remain stored in the device itself, which is not connected to the Internet (unlike the software wallets). This makes them the most secure among other types of wallets right now. The hardware wallets allow you to set up a PIN code to protect your recovery phrase, which is used to recover the funds in case the wallet is lost or stolen. Also, keep in mind that hardware wallets are less convenient to use on a daily basis compared to hot wallets. However, when needed, the coins are easily accessible. But let s not waste more of your time and look at some of the best hardware wallets bellows.
Coldcard is a secure, Bitcoin hardware wallet. The company behind Coldcard wallet is Coinkite, which is based in Toronto and founded in 2013. The wallet itself is made in Canada as well. The company is taking security very seriously as the Coldcard is the first hardware wallet offered PSBT (Partially Signed Bitcoin Transaction) thanks to BIP174. This future makes it possible not to connect the device to a computer or laptop ever, which makes it air gaped straight out of the box. To set up the wallet, you could use the external battery and then sign a transaction on an encrypted SD card. Afterward, you are moving the SD card into a computer or laptop, and you could proceed with the transaction. Another great future is that you could use the device with 3rd party open-source wallets such as Wasabi and Electrum. There almost endless possibilities with this little device.
Coldcard wallet security
Regarding the setup of the device, everything is pretty straightforward. The wallet generates 24 random words as your passphrase that you need to keep safe, but first, you need to select a PIN code from the device, which is two parts. With the pin, you will be given two words you need to memorize. Later, when you are using the device after entering the first part of the pin wallet will show these two words. If they correspond with words you have, then you should enter the second part of the pin. That is an extra layer of security; only ColdCard wallet does.
Regarding the security of the wallet, Coinkite uses a secure microchip ATECC608 to store and protect the 24-word passphrase. The only negative thing about the device is that it only supports Bitcoin, and if you want to store more private keys in the wallet, you should look somewhere else. But if you’re going to be a first-class Bitcoin citizen, this is the wallet you should have. Coldcard is definitely one of the best hardware wallets for storing your Bitcoin.
Bitfi is a hardware wallet that is endorsed by John Mcafee (founder of McAfee antivirus) and is a paradigm in the crypto world. Unlike any other hardware wallets, each Bitfi device has a unique firmware package. And the wallet does not permanently store your private keys, Ever. Your digital assets are stored on the blockchains. When you want to make a transaction (move, sell your coins, etc.), you just need to enter your SALT (6 characters min) and your passphrase (30 characters min) into your Bitfi device.
That will then calculate your private key for each token „on-demand“ and then delete that private key immediately. The tokens are added automatically, and the user can interact with any crypto-asset Bitfi provides through its interface. The interface allows interaction with the assets simply and conveniently, similar to logging into a bank account. Another main difference from some of the competitors is that Bitfi code is entirely open-source, which encourages developers anywhere in the world to watch it. Also, the Wifi connection makes it incredibly convenient to control your digital assets with a discrete and secure minicomputer in your hands.
Security of Bitfi wallet
As we mentioned above, Bitfi doesn’t store your private keys as the device is only generating the private key when you enter your seed and passphrase. And because the device doesn’t have a memory noting is stored permanently. MITM or men in the middle attack and supply chain attack. While the first one is if someone gets access to your wallet when you already have it, the second one is that the delivery company could access your wallet during the delivery process. The concern of both attacks is that someone can open the device and modify it to get access to your funds later. Both scenarios are improbable, but with the release of Bitfi 2, this problem is solved. On the new device, the USB data port is eliminated, so the wallet can not be connected to other hardware.
In our opinion, LedgerWallet is one of the most respected and trusted companies in the hardware wallet space. The company started in 2014 and up till now has sold 1,500,000 wallets in more than 165 countries. What makes the company different and innovative is a separate operating system called BOLOS, which they either integrate into a secure chip for their wallets or a Hardware Security Module (HSM) for various corporate solutions. Ledger is also the company that is adding a new cryptocurrency project much quicker than their competitors. Ledger hardware wallets are not open-source as the company needs to be trusted with the code.
Ledger Nano X
Ledger Nano X is the latest model of the company’s hardware wallet and is very easy to use. It connects to iOS, Android, and desktops. The device has two buttons that are used to navigate menus. Nowadays, the device has an impressive capability to manage over 1250 crypto assets simultaneously. Whenever you want to add new coins to your Nano X, you need to install the appropriate application. For example, if you want to add Bitcoin, then you must add the Bitcoin app on your Ledger. That means it allows multiple apps and coins to function at the same time on the wallet.
Nano X has excellent security thanks to the use of two chips. Additionally, the device can only be turned on if the PIN code is entered correctly. There is also a Bluetooth feature that will allow users to connect Nano X with their phone, computer, or laptop, without the need for a cable. We think that the only downside of this wallet is the Bluetooth user interface, which is a bit confusing. But in the near future, the company may fix and update that.
Ledger Nano S
The Ledger Nano S is a widely used compact USB device. S. The wallet supports more than 1300 coins that are great for people who like to hold a lot of different currencies and tokens. That is one of the reasons why Nano S is one of the best hardware wallets for storing altcoins. The device comes with a small OLED screen, which is bright enough to read. The OLED screen and both side buttons make it easy to navigate the Ledger Nano S user interface. Ledger Nano S is capable of launching third-party applications and similar to Nano X, it has secure chip technology. Ledger Nano S is the best selling hardware wallet due to its price, compact design, and friendly software.
Satoshi Labs is the first company that came with the idea of building a hardware wallet. The company founders are Pavol Rusnak, Marek Palatinus, and Alena Vranova. A significant advantage TREZOR has over its competition is the company reputation. TREZOR was the first firm to come up with the idea of a hardware wallet, and they are the most transparent company as they address every single issue with their products. You could use the Trezor wallet with Android devices and with apps such as Trezor Wallet, Multibit HD, and Mycelium.
Security of Trezor Wallets
The main difference with Ledger is that the device structure is different. Ledger uses secure elements in their devices, and their code is not open source. Trezor wallets are open source, but they don’t use secure chips in their devices. The wallets are pretty straightforward to use as you need to set up your 24-word passphrase. The original 24-word seed is formed using a random number generator from the device and the computer. Then with aPIN should be set up to protect the phrase, so every time you want to access the wallet, you will be asked to enter the pin. This is a measure in case you lose the device, and someone tries to access the funds. As a negative about the devices is that when you upgrade a wallet firmware, it often deletes the entire wallet and can be restored only with the passphrase that could be a bit annoying and should be taken into account. At the time of writing, Trezor T and Trezor One can support almost all major cryptocurrencies and Ethereum tokens.
Trezor One is the first cryptocurrency hardware wallet on the market and probably the most reputable one as well. Extremely easy to use via beautiful design with an OLED screen. But not as striking as Ledger Nano. It is easy and effortless to use and is currently the second cheapest hardware wallet on the market. It supports a wide range of cryptocurrencies like Bitcoin, Bitcoin Cash, Bitcoin Gold, Zcash, Dash, Ethereum, Ethereum Classic, Litecoin, and NEM. The only missing and widely publicized coin is the XRP.
Trezor comes with a better screen. The wallet also lacks any buttons and is entirely touchscreen. Of course, as an upgraded version, Trezor T has more coins available than Trezor One (such as XRP, Cardano, and Monero). While it looks similar to his predecessor Model T, offers better security when generating the passphrase. The passphrase is shown on the hardware wallet itself. However, at the same time is the most expensive of its competitors, which can be considered as something negative.
CoolWallet S is the hardware wallet with the best design here. It looks and feels like a debit/credit card. You may think the battery is not going to last, but actually, you could use the wallet for around two weeks before charge it again. The connection between CoolCard S and your phone is Bluetooth. Communication between the wallet and device is encrypted with the AES-256 encryption. That also used by the National Security Agency and others. The passphrase is stored in a secure element chip (CC EAL5+certified), and private keys never leave the wallet. Also, the wallet is not open source, but the company has plans to change that shortly.
The only downside of this device is that it doesn’t support that many coins like most of the competitors. It is priced very well for the futures and security that offers. Keeping the device in your standard wallet is another high positive. So you don’t need to worry about one more bulky item in your pocket.
KeepKey is a hardware wallet with a beautiful but design. It was released in 2015 but was acquired in 2020 by Shapeshift. The large LCD makes it easy for the user to act. The security, of course, is top-notch. KeepKey device operates together with the computer software to generate and store private seed. A 12-word passphrase can be used as default in the wallet as well with 18 and 24 words. Remember that the longer the passphrase is, the more secure your wallet is!
The device has a few disadvantages. As mentioned, the KeepKey wallet is quite big, which means it can be challenging for someone to carry comfortably in their pocket. Another one is that the development is slower compared to Ledger and Trezor. KeepKey wallet main disadvantage is that it only supports a limited number of cryptocurrencies. As we mentioned, the Shapeshift exchange acquire KeepKey. For that reason, it incorporates an in-wallet exchange that allows you to trade one cryptocurrency for another without using an external exchange.
Losing access to your cryptocurrency wallets can be quite costly, as this is the only way to restore your wallet in case if something goes wrong. Therefore, it is imperative to back up your seed phrases and store them in secure locations. Another important thing is that you should always buy the hardware wallets directly from the company websites and not from 3rd parties. There are different opinions, which are the best hardware wallets. But the best wallet for one person does not necessarily mean the best for another. There are positives and negatives with every device. It all depends on your needs and technical skills but basically, these are the best hardware wallets for storing cryptocurrency on the market today.