Ethereum’s (ETH) smart contract technology provides a platform for developers to build and develop decentralized applications (DApps). The demand for Ether has increased after the price shot up in 2017 from below $100 to above $1000. This has increased the attempts at phishing and hacking Ethereum private addresses to steal Ether. This article aims at explaining the best way to store your Ethereum and cryptocurrency hardware wallets that provide the best security to your ETH at the cheapest rate.
How do hardware wallets work?
A typical cryptocurrency wallet, whether hot or cold (online or offline), has two main functions;
- Generating the key set. This is the public and private keys that are used to access your wallet address.
- Manages and allows execution of transactions within the wallet using special algorithms.
Hardware wallets are known as the safest way to store any cryptocurrencies since they work offline hence avoiding hacks. However, this does not mean complete security due to technical issues that may at times occur on any network.
Important issues to keep in mind
1. Geographical Area
Most countries in Europe, Asia and also North America have full access to these wallet products while in some countries in rest of the world these hardware wallets may be non-functional. Check if the device works in your country.
2. Test the wallet on delivery
To avoid any cases of damage on the hardware wallet make sure you check the device on delivery to ensure that the device’s software or hardware was not compromised during delivery.
Check your wallet providers’ security measures before buying or storing your ETH in the hardware wallet or even on the exchange wallet. Basic security measures for Ethereum wallets include a ‘captcha’ image to secure the site from bots and the 2 factor authentication (2FA). Some have 3-factor authentication for extra security. The harder it is to crack your wallet address the better.
The 3 best wallets to store your Ethereum
|Ethereum Hardware Wallets||Reviews||Security||Anonymity||Ease of Payment||Ease of use||Price|
|Ledger Nano S||Ledger Nano S Review||Low||Low Privacy||PayPal|
|Trezor||Tenzor Review||High||High Privacy||Bitcoins|
|KeepKey||KeepKey Review||Very High||High Privacy||Paypal|
1. Ethereum Hardware Wallet: TREZOR
Trezor is one of the oldest hardware wallets in the market developed in May 2013. The coin authenticates the transaction and sends an online note which is signed by the device solving a unique algorithm. This can only be done using the private key stored on the hardware wallet.
Once purchased, connect the wallet to your computer. Follow the installation instructions that will pop up on the desktop screen and the mini screen on the Trezor device to install your PIN code.
Trezor requires a PIN code to be backed by a 24 word phrase to ensure top notch security level. You may choose to add a 25th word for extra protection to your wallet. Each wrong attempt of this PIN code increases the time needed to log in exponentially making it difficult to guess the PIN. The wallet is available in either white or black and also allows storage of Bitcoin, Litecoin, Dash, ZCash and Dogecoin.
You can also check this Trezor Review.
How to buy Trezor
1. Go to the official TREZOR shop website (make sure it has the sign shown below) and log in to your account.
2. Select your choice of device. The Trezor hardware wallet is available in black or white. Click on ‘Add to Cart’.
NB: Trezor currently offers a $27 discount on purchasing the multipack instead of individual purchases.
3. Fill in your shipping details and wait for your shipment through DHL.
4. Click ‘Proceed to Checkout.’
5. Enter your shipping address details as prompted on the next page.
6. Pay in Bitcoins or using your credit/debit card.
7. Fill in your payment details if using your card and you are set to go. The shipment takes about 2-5 business days.
2. ETH Hardware Wallet: Ledger Nano S
The most popular cryptocurrency hardware wallet has to be Ledger Nano S. It was built in July 2016, later than any of the wallets discussed in this article. The wallet focuses on being highly secure and malware proof. It is one of the cheapest hardware wallets priced at only $75. Ledger is a metallic structured wallet with an OLED screen on it.
The wallet resembles a USB storage device with the only selection of color being black. Similar to the Trezor hardware wallet, you need a U2F authentication to transact through the wallet. The verification PIN requires physical keying of the PIN from the Ledger Nano S ensuring total safety from any hacks.
You can also check this Ledger Nano S Review.
How to buy Ledger Nano S
1. Go to the official Ledger Nano S website and click on the ‘Products‘ tab.
2. Once on the ‘Products’ tab choose the Ledger Nano S wallet from the list of products and proceed.
3. Choose the quantity of Ledger Nano S wallets you wish to buy and click ‘Add to Cart’.
4. Click Checkout once you finish shopping.
5. Fill in your shipping address details and payments details to finish your purchase.
6. Pay through your credit card, PayPal or Bitcoins.
7. Confirm your details and finish the purchase.
- The shipment will take 2-5 business days.
- NO refund is awarded to customers providing wrong addresses or lack of clearing the customs fees.
3. Ethereum Hardware Wallet: KeepKey
KeepKey hardware cryptocurrency wallet was introduced to the market in July 2015. The wallet currently works on any PC, Mac and Linux computer but is not yet accessible to the Android OS. The wallet has a 256 X 64 pixels OLED screen with an anodized aluminum case and a polycarbonate front.
The wallet is slightly expensive than its peers but offers a high end security system. The lack of an operating system makes it impossible to hack the device even when connected to a malware-infected PC.
In the event that you misplace or damage the wallet, the tokens can still be recovered through a 12 word passphrase that is encoded in the device during installation. This passphrase should not be shared to anyone and should be kept safe. The wallet also self-destructs in case of any tampering or hacking.
You can also check this KeepKey Review.
How to buy Keepkey
1. Go to the official KeepKey website and click on the green ‘Buy Now’ icon on the upper right hand corner.
2. Buy your desired KeepKey hardware wallet and proceed to ‘Add to Cart’.
3. Select the number of KeepKey hardware wallets you wish to buy and select ‘Checkout.’
4. Fill in your shipping address and payment information.
5. Pay for the purchase using your PayPal, debit or credit card.
6. Confirm your details and click continue. The shipping time is 2-5 business days.
Frequently Asked Questions
How do I know which wallet is best for me?
Currently, only these three wallets are compatible to store your Ethereum. Ledger offers the cheapest option while KeepKey is the most expensive, so it is up to you to decide which to pick. I would recommend the Ledger Nano S due to its ease of use and backup feature which keeps your coins safe in the event of damage or misplacing the wallet.
Any common mistakes to be careful of?
The immutable nature of hardware wallets pose a problem if the ETH is sent to a wrong address. You need to be careful of the address you send the tokens to before validating the transaction. Ensure you add extra security measures such as 2FA to your wallet before validating any payment or transaction.
How do I secure my Wallet?
- Keep your wallet in a safe place.
- Download and install verified updates from your wallet provider only.
- Use the Multi-signature feature that is available on most hardware wallets. This feature requires different and multiple individual authentications for any transaction to be carried out.
- Back up your seed and passphrases securely in case the wallet gets damaged or stolen.
Why are hardware wallets safer?
No hacking policy. Hardware wallets are the safest wallets yet, with no hacking claims reported since inception of the devices.
Easy and efficient to use. Hardware wallets gives the early learners and amateurs an easy introduction to storing their Ethereum as compared to online or exchange wallets.
TREZOR, Ledger Nano S and KeepKey all have a digital display to help you manage and transact your tokens more efficiently.
What happens if the hardware wallet company goes out of business?
In case a hardware wallet company liquidates or is declared bankrupt, your coins will still remain safe. The 24-word seed (+additional passphrases)/ 12 words are a standard format that can be retrieved by any other wallet. Keep the passphrase very carefully.
Do hardware wallets work with Coinbase?
TREZOR and Ledger Nano S are the most compatible hardware wallets to Coinbase. However, the exchange charges a few dollars to move your coins to the hardware wallet. Read more on how to transfer coins from Coinbase to a hardware wallet.
Why do the hardware wallets have buttons?
The buttons on wallets enable the user to key in their PIN code manually. This increases the security measures against hacking since a hacker has to physically obtain the wallet.
Should I take a picture of the seed with my phone as a backup?
No. Storing your passphrase on phone increases the chances losing your coins in case of a successful hack attempt on your phone. The best way is to write the passphrase down on paper and store it safely.
How many backups of my seed should I create?
You do not need a new back up every time you make a transaction. Back up your 24 word seed only once and for all. The seed will then be used to derive your private keys.
The wallets in this article are the three best wallets that are compatible with Ethereum currently. It is crucial to remember that your crypto coins are only as safe as you are careful. Some of the most common mistakes hardware wallet holders make are storing the wallet carelessly, making trades to the wrong address and forgetting your PIN. Keep all these in mind before using any of these hardware wallets.