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Key Takeaways:
Crypto hardware wallets, also known as cold storage, are physical devices which store the private keys to your digital assets. These devices are physically disconnected from the internet and ensure that your assets are safe even if your computer or cell phone is compromised.
By keeping your digital crypto assets offline in a cold wallet you reduce the risk of hacks, phishing or malware attacks. Cold wallets are ideal for holding assets that you don't plan to use or transfer regularly.
This is more advanced comparison article. If you're at the very beginning of your crypto journey, check out What Is a Crypto Wallet and How to Choose the Right One? for the basics. When you're ready, head back this way to grasp the nuances and tradeoffs of the leading cold wallet providers.
Key features to consider when choosing a cold storage wallet
Security of your digital assets is the number one concern when choosing a cold storage wallet.
Blockchain support is also high priority as the number of L1s and subsequent L2s expands at a rapid pace. Early versions of cold storage hardware wallets were limited on network selection. Current generations have expanded to include 5,000+ networks in some cases.
Devices which allow the connection of many applications. The first class of hardware devices were limited to how many apps could be connected concurrently. New deployments enable connection to hundreds of unique applications. Lastly, ease of use in incredibly important in order to limit mistakes and provide confidence to both novice and experienced users
Here's a list of what to look for in a high-quality wallet:
- PIN protection
- Passphrase encryption
- Self destruction and recovery
- Blind signing vs. Clear signing
- User friendly onboarding flows
- Human readable transaction details
- Mechanisms which will completely shut down access to private keys if malicious activity is detected
- Streamline recovery processes in the event of compromised device or lost wallet information
What are the most popular hardware wallet options?
Ledger, Trezor and Keystone have emerged as the most popular hardware wallets on the market. Collectively they have two decades of experience in protecting digital assets and offer community trusted options for storing cryptocurrency.
Each platform caters to different user needs from beginners needing a simple streamlined process to advanced users looking for premium features and enhanced security.
Ledger
Ledger is one of the oldest and most established hardware security platforms. Founded in 2014, Ledger has become the most well known cold storage device brands and offers a full suite of options for different user needs.
For a deeper dive, check out What is a Ledger Wallet?
Ledger Strengths
- Security: Utilizes a certified secure element (CC EAL5+) to isolate private keys, similar to those used in credit cards and passports.
- Multi-Currency Support: Supports over 5,500 cryptocurrencies, allowing users to manage multiple assets simultaneously.
- User-Friendly Interface: The Ledger Live app provides an intuitive platform for managing transactions, staking coins, and accessing decentralized applications (DApps).
Models
- Ledger Nano S Plus: Affordable, multi-chain support
- Ledger Nano X: Bluetooth-enabled, mobile-friendly
- Ledger Flex: Flexible design for portability
- Ledger Stax: Premium model with advanced touch interface
Ledger devices are managed using the Ledger Live dashboard. Labeled as a companion app for Ledger hardware wallets it allows users to:
- Create and manage accounts which store private keys
- Interact with 5,000+ different cryptocurrencies
- Real time balance monitoring
- Send and receive tokens with transaction overview
Ledger Nano S Plus & Ledger Nano X
Both the Ledger Nano S Plus and Ledger Nano X are considered entry level devices who are perfect for both newcomers to crypto as well as advanced users looking for economical cold storage.
The Ledger Nano S is their flagship device first released in 2016 and has been upgraded over several generations. One of the best selling devices of all time, Nano S Plus is the latest iteration. Originally released in 2016, it is the only device in the Ledger stack whose only connection point is via USB-C and does not have Bluetooth capability.
Typically the Ledger Nano S platform is used to store crypto for long periods of time without need to regularly move digital assets between wallets.
The Ledger Nano S Plus was released in 2021 with several improvements including:
- Increased application storage capabilities, the original Ledger Nano S could only support a few applications at a time while the Nano S Plus allows for installation of up to 100 apps.
- Larger pixel display
- Increased support to 5000+cryptocurrencies. The Ledger Nano S supported around 1000 different coins notably missing SVM (Solana Virtual Machine) networks.
Although the original Nano S is no longer for sale, Ledger still provides support for the device as it continues to be used around the world. The Ledger Nano X boasts a similar physical design to the Nano S with the main differentiating factor being Bluetooth capability. According to the brand, it is a "mobile-first Ledger for convenient day-to-day, on-the-go use".
Ledger Flex & Ledger Stax
The Ledger Flex and Ledger Stax include all of the features of the Nano S Plus and Nano X with several notable improvements. Ledger Flex devices are available now, Ledger Stax preorders are open now and are slated to ship at the end of October, 2024.
E Ink Touchscreen
Ledger Flex and Ledger Stax introduced an interactive touchscreen (E Ink) with the goal of streamlining the customer experience and providing clarity while signing transactions. These improvements help turn the traditional long term storage meta into a daily carry device which can be used to interact with apps on a regular basis.
Blind Signing -> Clear Signing
The first generations of Ledger hardware wallets operated on a blind signing principle. There were very few details available and they were not displayed in a human-readable format. These transactions were designed for computers to understand (an indecipherable sequence), not for the users.
Clear Signing transforms blockchain transactions into an easy to read format which allows you to 'see what you sign'. For example before Clear Signing was in place users were not able to see what kind of approval was being requested or which application was requesting it.
This is a significant security improvement which reduces the risk of signing malicious transactions and giving consumers confidence that they are not being rugged. Clear Signing turns the Ledger Flex and Ledger Stax into every day carry devices which can be used regularly to interact with blockchain applications.
Trezor
Trezor is another OG hardware storage brand who originally launched in 2012 with their first prototype unveiled at the Bitcoin2014 crypto conference. The first production model, Trezor Model One, shipped in 2016.
For a deeper dive, check out What is the Trezor Hardware Wallet?
Trezor Strengths
- Open Source: Fully open-source software allows for transparency and community trust.
- Advanced Security Features: The Model T includes Shamir Backup, allowing users to create multiple recovery shares for enhanced security.
- User-Friendly Interface: The Trezor Suite app provides an easy way to manage digital assets.
Models
- Trezor Model One: Budget-friendly option with core features
- Trezor Model T: Interactive touch screen and on-device transaction confirmation
- Trezor Safe 5: Advanced security for multiple assets
- Trezor Safe 3: Simplified version with robust security
Each Trezor device is managed using their bespoke application called Trezor Suite which enables users to:
- Send, receive, trade and stake tokens
- Track portfolio balances
- Review and sign transactions
In addition to their commitment to physical device security, Trezor is dedicated to the anonymity of their customers as well. Data generated during the purchase process is deleted or stripped of personal details within 90 days.
Trezor Model One
Model One was released in 2014 and marks Trezors entry into the hardware storage device market. It is the only device Trezor manufactured that did not include a secure element chip.
Although it does not have the secure element chip (more on this later), it maintains a reputation as being one of the most popular cold storage devices for long term storage.
Users navigate the Trezor Model One using two physical buttons.
Trezor Model T
Model T was the first device that Trezor offered with an interactive touch screen and on-device transaction confirmation. It also is the first model to include a secure element chip. The chip is designed to increase physical security of user data, particularly the PIN and recovery seed.
Another departure from the Model One design is the use of Shamir Backup technology in place of standard recovery seed methods. Known by SLIP39 in technical circles, Shamir's Secret Sharing splits your backup phrases into multiple shares which reduce the likelihood of losing your secret phrase.
The Model T is considered open-source, the code is public and auditable by their global community who are encouraged to test the device for security vulnerabilities.
Trezor Safe 3 & Trezor Safe 5
Released in 2023, Trezors Safe 3 and Safe 5 are the latest generation of devices. Although similar, there are several key differences between the two.
Trezor Safe 3 has the same display and navigation as the Trezor Model 1. The Secure Element chip received a massive upgrade. It is also equipped with the standard 12/24 word recovery phrase.
Trezor Safe 5 has a much larger color touchscreen with haptic feedback along with a more intuitive user interface. It's Secure Element chip is slightly different than the Safe 3 with an NDA-free chip. In addition to the standard 12/24 word recovery phrase it adds Shamir's Backup Standard.
Trezor Safe 5 is also offered in a 'Bitcoin' only model which only holds BTC and Bitcoin network assets.
Display and user experience
- Safe 3
- Same display and navigation as the Trezor Model 1
- Safe 5
- Much larger color touchscreen with haptic feedback along with a more intuitive user interface
Security features
- Safe 3
- Updated EAL6+ secure element
- Safe 5
- NDA-free EAL6+ secure element
- Advanced multi-share backup
Backup solutions
- Safe 3
- Standard 12/24 word recovery phrase
- Safe 5
- Standard 12/24 word recovery phrase
- Shamir's Backup Standard
Keystone
Keystone is one of the newer crypto cold storage providers who embrace traditional hardware device design while adding their own unique security protections. Rebranded from it's original name in 2021, Cobo Vault, their flagship device has been a market hit.
For a deeper dive, check out What is the Keystone Hardware Wallet?
Keystone Strengths
- Air-Gapped Security: Keystone devices can operate completely offline, enhancing security against online threats.
- Biometric authentication: Prevent physical attacks from gleaning data and private keys.
- QR Code Transactions: Allows users to sign transactions without connecting to a computer or smartphone, reducing exposure to potential attacks.
- Multi-Currency Support: Compatible with various blockchains including Ethereum and Solana.
Models
- Keystone 3 Pro: The first model branded under the Keystone name which is available for consumer sales
- Keystone 3 Pro NFT Customization
- Keystone 3 Pro Co-Branded Version
Keystone 3 Pro
The first major differentiator between Keystone and Ledger/Trezor is their integration of three separate security chips which manage multiple crypto accounts.
Secure Elements
Keystone's distinctive approach to security is due to the integration of three different Secure Element chips. Each has a unique role in wallet security and collectively protect seed phrases and user biometric data.
- Microchip ATECC608B & Maxim DS28S60
- Specifically engineered to safeguard seed phrases (and private keys in turn)
- They work together, ATECC608B provides security at the hardware level and the DS28S60 ensures that a trusted platform module is always in place.
- Maxim MAX32520
- Microcontroller that secures biometric data (fingerprints in this application)
Secure Elements are the type of chips used in passports, credit cards and other applications that require sensitive information to be kept under lock and key. They are tamper resistant and notoriously difficult to compromise.
Keystone's Secure Element chips prevent a myriad of physical attacks including:
- Side channel attacks are a method that focuses on observing a device's physical behavior such as energy consumption, electromagnetic emissions and sounds to reveal information about what is being processed.
- Power Analysis - the most common vector which reads changes in power consumption while a transaction is being signed to identify the private key.
- Cold Boot - this vector examines any physical memory that a device may be holding directly after powering down.
- Faults - finding faults in the hardware construction or software integration can be induced by introducing known electric currents and observing how the device reacts.
Conclusion
With the rise in crypto adoption, securing your digital assets with a hardware wallet is more important than ever. Whether you’re looking for budget-friendly cold storage like the Ledger Nano S Plus or advanced, premium devices like the Trezor Model T or Ledger Stax, there’s a solution tailored to your needs.
Ensure your wallet supports multiple blockchains, has strong security features, and provides an easy-to-use interface to make managing your digital assets as secure and simple as possible.
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