Whether you’re new to the cryptocurrency game or have already been around the block, you’ve probably heard about hardware wallets. But what are they, exactly? Why do I need a wallet to contain my invisible currency? That’s a good question, which is best answered by looking back at a momentous year in crypto.
You see, it’s no secret that fraud, cyber attacks and theft are prevalent in the cryptocurrency industry. In December of 2021, BadgerDAO was robbed of around $166 million in funds. Days later, crooks made off with approximately $208 million from BitMart. To top it off, the biggest crypto heist in history (to date) occurred only in August 2021, where Poly Network was hacked and lost a faint-worthy $831 million of investors’ funds.
Is your heart pounding yet?
What is a cryptocurrency hardware wallet?
Hackers are a huge reason why you need to take preventative measures when it comes to safeguarding your crypto. This is why many cryptocurrency investors purchase a hardware wallet.
A hardware wallet is a physical wallet (that usually resembles a USB thumbdrive) which can store your cryptocurrency offline. By taking your digital currency off the internet, you stand a better chance at avoiding cyber attacks where someone could swipe all of your hard-earned invisible money.
All hardware wallets come with a public and private key. The best way to explain what a public and private key are is to think about them like a bank account.
A public key is like a bank account number. If someone possesses your public key, then anyone can transfer crypto to you just like you would transfer funds to your bank account. A private key is like your debit card’s PIN. It’s a form of security that prevents other people from accessing your account so it’s best not to share your PIN with anyone, or leave it lying around.
Why do you need one?
Unfortunately for this booming industry, it’s just not as regulated as it should be.
First you need to understand that crypto wallets usually fall into two categories. The first is a “hot wallet”. “Hot” simply means that your wallet is connected to the internet. On one hand, this means that any cryptocurrency left online is susceptible to cyber-theft. On the other hand, it’s the most convenient way to access your cryptocurrency and you’re less at risk of misplacing it (we’ll elaborate on that in a second). Some examples of hot wallets you may have heard of include MetaMask and Coinbase Wallet.
The other type of crypto wallet is a “cold wallet”. As you can probably guess, it essentially means the opposite of a hot wallet. A wallet is “cold” when it’s offline, meaning it can’t be compromised by hackers. However, a cold wallet which usually takes the form of a physical wallet can be misplaced or lost. Thankfully, your PIN should prevent others from accessing it and there are a number of backup programs that will allow you to recover your crypto if you get into a sticky situation.
In addition, if you’re someone who wants to make transactions on the fly, a cold wallet might not be for you. Despite being more secure, you’ll often need to rely on getting to USB-compatible computer in order to get going. That said, more and more cold wallets are utilising Bluetooth technology to combat this matter of inconvenience.
You see, hardware wallets (a.k.a cold wallets) are the most secure option if you want to protect all of your crypto. All you have to do is withdraw your cryptocurrencies from its exchange and into the hardware wallet. Then, you can unplug it and pop it in your desk or attach it to your keyring to take it with you anywhere you go.
To help keep your crypto secure, we’ve handpicked a few hardware wallet options. Check them out below.
Our recommended picks
The perfect budget and entry-level hardware wallet. This cold wallet is by Ledger, one of the first hardware wallets makers on the market and the most popular. The Nano S passes for any SanDisk USB drive until you look a little closer. It’s able to support over 1,800 different kinds of coins and tokens making it both versatile and savvy. However, it can only store three coins at the same time. So if you own more than three types of crypto you might want to look at the next product on our list.
A massive step up from the Nano S, the Nano X is for cryptocurrency fiends. On this wallet, you can manage up to 100 coin apps at a time — including Bitcoin, Ethereum and more. Plus, the Ledger Nano X features Bluetooth connectivity so you can conveniently access Ledger Live, the “all-in-one crypto ecosystem”, on your smartphone or computer without involving any pesky cables.
SecuX is one of the most competitive brands on the market for both its affordability and its status as one of the most secure hardware wallets in the world.
If you want the most bang for your buck, the SecuX W10 is one of the few under $100. While most hardware wallets are navigated through your computer, the W10 allows you to utilise its 2.8-inch touchscreen instead. The SecuX W10 supports holdings of up to 500 accounts and can store all of the major cryptocurrencies including Bitcoin, Ethereum, Ripple and over 1,000 ERC-20 tokens.
This is an ideal option for those of you who own multiple coins, make frequent trades and want premium security on a budget.
If you want the Bluetooth capability of the Ledger Nano X plus the touchscreen display of the SecuX W10, then the SecuX V20 will give you the best of both worlds for an affordable middleground.
If we compare the SecuX W10 to the V20, what the W10 lacks is its inability to connect to your smartphone. So if you’d prefer to check on your crypto with a bigger screen, this model is the one for you.
BitBox isn’t as well known as some crypto wallet brands such as Ledger, but it works just as great and is a perfect first hardware wallet for new investors. All you need to do is download the BitBox app onto your device, set it up and off you go. It even comes with a Micro SD card, which can be used as a passwordless back up. This means you don’t have to write down a seed phrase like most crypto wallets expect you to do. Of course, you still have the option to set one up anyway.
However, the BitBox02 is limited to just three blockchains — Bitcoin, Litecoin and Ethereum — but that’s alright if you’re just concerned with dipping your toe in the crypto market to expand your portfolio.
Accessories for your hardware wallet
If you decided to go for a Ledger, you’ll want to grab one of these protective pods. They resemble a mini drink bottle and are easy to hook onto your keyring so you’re less likely to lose your wallet or accidentally break it. You can get one for the Nano S or X here for $39.42.
You can get something a lot bulkier if you prefer by going with this protective case for the Ledger Nano S. This one is more of a hardshell case that will keep your Ledger comfortably and safely contained. Check it out here for $11.99.