The combined market capitalization of cryptocurrencies recently breached the $2 trillion mark, rivaling physical currency circulation in many parts of the world. Unlike physical currencies, cryptocurrencies are vulnerable to electronic theft and loss. The good news is that hardware wallets can help reduce these risks and keep your crypto asset safe.
Let’s take a look at the best crypto hardware wallets and how to pick the best option for yourself.
What Is A Crypto Hardware Wallet?
A crypto hardware wallet, in simple terms, is a tangible portable device that gives you secure access to your cryptocurrency. A hardware wallet essentially generates a user's private key in a secure and offline environment. Typically connected to via Bluetooth or any internet-enabled device, crypto hardware wallets are very easy to use and feature a dedicated screen to verify and approve transactions, thereby helping prevent disclosure of sensitive information to the internet-connected device.
In other words, a hardware crypto wallet is a physical electronic device, built to secure crypto coins and must be connected to an internet-enabled device (computer, phone, or tablet) before coins may be spent. A crypto wallet is highly recommended by the moguls of the crypto world owing to its security advantages along with the fact that it gives tactile control to users on their funds.
Do I Need A Crypto Hardware Wallet?
Public and private keys are an integral part of Bitcoin and other cryptocurrencies. In particular, they are essential to sending and receiving cryptocurrencies without the need for third parties to verify transactions. Public keys are similar to a bank account and routing number whereas private keys are similar to the password to your online banking account.
Most cryptocurrency users store their public and private key on an exchange, such as Coinbase, in a virtual “hot” wallet, or one connected to the internet. While it’s easier to buy, sell and use cryptocurrencies in “hot” wallets, some people prefer to store their cryptocurrencies offline in “cold” wallets. These wallets can either be software-based wallets or hardware-based wallets.
Hardware crypto wallets are considered to be the gold standard of the crypto world in terms of security. They aren’t stored online like “hot” wallets where they could be hacked or lost, nor are they stored in a software program that could be hit by malware or hard drive failure. Hardware wallets are dedicated devices designed to keep private keys safe and offline—but still accessible. Here are some definitive advantages and disadvantages to help you decide if you really need a hardware crypto wallet.
The major pros and cons of crypto hardware wallets include:
- Better Security: Separating private keys from the Internet and software reduces the likelihood of theft from hacking or malware.
- Easier Management: Keeping private keys separate from other devices makes them easier to manage and transport between devices.
- No Dependencies: Hardware wallets don’t depend on services, apps or other tools that might go out of business or change over time.
- Higher Cost: Hardware wallets require a separate purchase that isn’t necessary with virtual wallets or software wallets.
- Less Convenient: Using cryptocurrency is less convenient since the hardware wallet must be present with each transaction.
- Other Risks: Hardware wallets can be lost, destroyed or even hacked if they are physically stolen.
What Are The Best Crypto Hardware Wallets?
Though there do not exist tons of crypto hardware wallets on the market today, it still is a fairly new concept that makes it difficult for crypto owners to pick the best suitable wallet for themselves. The most popular wallets are listed below-
#1. Trezor T & Trezor One
Trezor built the first cryptocurrency hardware wallet and has since sold hundreds of thousands of devices in more than 150 countries around the world.
The Trezor T Trezor model is a compact hardware wallet that stores cryptocurrency private keys—but it also stores passwords and can be used as a U2F hardware token. With its full-color touchscreen display, it’s easier to use than a lot of other hardware crypto wallets and can be set up in a few easy steps, making it an ideal option for new users.
The Trezor One is a simpler version of the Trezor T and costs less than $100. Unlike the Trezor T’s full-color touchscreen, the Trezor One has a monochrome display with two buttons and requires a computer or mobile phone for PIN and passphrase entry. That said, users still get the same underlying platform and security as the Trezor T.
The hardware wallet’s interface makes it easy to buy, send, receive or exchange cryptocurrencies, as well as view transactions and performance. In addition, the password manager makes it easy to create, generate and view all kinds of passwords.
#2. Ledger Nano S & Ledger Nano X
Ledger is another extremely popular cryptocurrency hardware wallet. Unlike Trezor wallets, Ledger wallets are made with stainless steel rather than plastic and run on a proprietary BOLOS operating system rather than open-source firmware and software.
The Ledger Nano S is a hardware wallet that looks a bit like a USB flash drive. With support for more than 30 cryptocurrencies and all ERC20 tokens, the device protects all of your private keys with an 8-digit PIN code. With a $60.00 price point, the hardware wallet is priced the same as the Trezor One, making it an affordable option.
The Ledger Nano X is a premium version of the Ledger Nano S that provides a larger screen, supports more apps, and has a USB-C and Bluetooth® connection. However, it’s worth noting that the Ledger Nano S doesn’t require a battery whereas the Nano X has an 8-hour battery life, which could be limiting for some use cases.
The Ledger application makes it easy to buy, sell, exchange, stake, lend and manage 27 coins and more than 1,500 tokens from a smartphone or computer.
KeepKey is arguably the third most popular hardware wallet with a lower cost than the Trezor or Ledger at $50.00. While it supports fewer cryptocurrencies than its two bigger competitors, the wallet provides a larger (albeit lower resolution) screen. The user interface on the device is also much simpler than the Trezor and Ledger wallets.
Unlike the Trezor or Ledger wallets, KeepKey relies on a Chrome extension on the software side to manage everything. The application’s user interface is also less advanced than its competitors, although some users may prefer its simplicity.
Best Crypto Hardware Wallets: Alternative Hardware Wallets
Trezor, Ledger and KeepKey are the three most popular hardware wallets on the market, but there are plenty of other options out there. In general, most alternative hardware wallets have limited support for cryptocurrencies but offer stronger security protocols.
Some other options to consider include:
- ColdCard: A Bitcoin-only hardware wallet that’s backed with Secure Element and open-source software making it one of the most secure options out there.
- Billfodl: A stainless steel card designed to store seed backups in a fire-resistant, waterproof and generally more secure form than paper.
- BitBox02: A Bitcoin-only hardware wallet that is open source with a dual chip design for enhanced security relative to the Ledger or Trezor.
- SafePal: A Binance-funded hardware wallet designed with multiple layers of security and a self-destruct mechanism, along with support for a large number of cryptocurrencies.
- Cobo Vault: A Bitcoin-only hardware wallet with a QR code-based transmission mechanism, open-source firmware and a Secure Element for maximum protection.
Best Crypto & Bitcoin Hardware Wallets: Brief Comparison
How to Choose The Best Hardware Wallet
The right hardware wallet depends on your individual requirements and priorities. For instance, a cryptocurrency investor that holds a variety of different cryptocurrencies won’t want to use a Bitcoin-only wallet. At the same time, someone looking for maximum physical security may not want to use a Trezor wallet due to the lack of a Secure Element.
In addition to functionality and security, price, reputation, and user-friendliness may play important roles in deciding on the best option. The Trezor and Ledger wallets provide an easy-to-use and attractive interface along with strong reputations while the KeepKey has a long track record and one of the lowest prices for hardware wallets.
Checklist of Popular Crypto Software Wallets
Now that we have established the best crypto hardware wallets, it must be understood that crypto wallets are not only of the hardware kind and instead, are of two types; hardware wallets and software wallets. Software wallets include desktop wallets, mobile wallets, and online wallets and can be alternatively chosen to store crypto assets if you're not interested in buying a hardware wallet.
- Desktop Wallet: The currency is stored on a PC or laptop. Offers optimum control without a third-party interface but is not considered secure.
- Mobile Wallets: Accessible through an app on your mobile device and can be used anywhere. Such wallets either store your coins on your phone or give you access to online storage servers, depending on the app you choose to use.
- Online Wallets: Web-based wallets that can be accessed from any device, any location. However, it must be noted that online wallets may not be as secure as they store the private keys online and are controlled by a third party.
If you wish to get yourself a software wallet, use the following list to learn about some of the most popular software wallets.
- Exodus is a desktop and mobile software wallet with a simple user interface and a built-in exchange. With support for over 100 different cryptocurrencies, the software wallet is great for beginners that are just getting started.
- Electrum is one of the oldest open-source Bitcoin wallets that supports multi-sig and cold storage, among other capabilities. In addition, you can export your private keys and use them with other Bitcoin clients.
- Mycelium is a software wallet that supports Bitcoin, Ethereum, and meaningful ERC20 tokens. The wallets are reproducible, open-source, incognito, and untraceable with advanced cold storage, saving, and spending accounts.
- Wasabi is a popular open-source, non-custodial, and privacy-focused Bitcoin wallet that prioritizes privacy. In particular, the wallet supports rotating addresses, built-in CoinJoins, and customs fees.
The Bottom Line
Cryptocurrencies have become increasingly popular over the past decade. As prices continue to move higher, criminals have never been more motivated to compromise exchanges and wallets. Hardware wallets are a great way to reduce risk by moving private keys off of the internet and onto disconnected wallets where there’s less surface area for attack.
In addition to choosing a hardware wallet, cryptocurrency users should ensure that they have the right software in place to manage things like trading and taxes. ZenLedger makes it easy to aggregate transactions across exchanges and wallets—including hardware wallets—and ensure that taxes are accurately calculated each year. Try it for free!