Why Own a Cold Wallet?

So why exactly use cold wallets instead of hot wallets?

As suggested, cold wallets offer you a way of storing private keys without risking that your data is stolen or manipulated.

You may wonder, Why not just use a hot wallet and simply secure your device? You can do that, but computer malware can be disguised as a legitimate software program and trick you into authorizing access to your computer. It may even get past your antivirus.

Additionally, no one can access a cold wallet without your permission. A cold wallet operates offline, giving a greater deal of security to your private keys. Thus, using a cold wallet is safer because it prevents hackers from accessing your private keys and stealing your cryptocurrencies.

Cold wallets are physical hardware (like USB flash drives). They usually have a hard plastic case surrounding a small screen that distributes the information. In order to access your private keys, you are required to set up a PIN. When you set up for the first time, the PIN is a list of around (generally) 12 to 24 words. This set of words is known as the seed phrase or seed recovery phrase.

You should write down the seed phrase and keep it somewhere safe, because if you lose your cold wallet or it becomes corrupted, you will need this seed phrase to re-access your crypto. You can then complete transactions with ease and just confirm them through your hardware.

Most cold crypto wallets have similar functions, but they might slightly differ in how they work. Of course, these cold wallets support Bitcoin and other altcoins such as Ether, but most of the major cold wallets will support a wide range of other coins, too.

Two of the most prominent cold wallets are Ledger and Trezor. In this article, we’ll compare Ledger and Trezor, and compare some of their pros and cons, main security features, supported coins, price and other features.

This French firm is another leader in hardware wallets, and also offers two popular wallets. As a hardware wallet leader, Ledger is concerned with security. To this end, the company has ensured that both hardware wallets meet specific security certifications, although products are not fully open source due to manufacturer limitations.

The Ledger Nano S was released in 2016 and is considered one of the safest and cheapest hardware wallets. The Nano S is the only independently verified hardware wallet and has clocked in over 1.5 million-plus sales.

While lacking in storage size, this is a reliable, well-received hardware wallet at a reasonable price point.

Features:

  • Size: USB-sized
  • Screen Size: 128 x 32 pixels
  • Asset Storage: 3–18 digital assets simultaneously
  • Native Support: 22 cryptocurrencies
  • Total Support: 1,100+ cryptocurrencies
  • External Wallet Support: 55+ wallets
  • Asset Recovery: 24-word sentence restores the account
  • Color: Black, yellow, pink, green, blue, or transparent
  • OS Compatibility: PC, Mac, Linux, and Android
  • Security: PIN code, recovery sentence
  • Certification: Certified Secure Element (CC EAL5+) + Independently certified by ANSSI

The Ledger Nano X is the newest hardware wallet, as it was released this year (2019). This wallet deviates from other competitors in that it focuses on mobility, specifically its Bluetooth accessibility and built-in battery. In addition, the Ledger Nano X (and Ledger in general) is well-known for its focus on certified security.

Features:

  • Size: USB-sized
  • Screen Size: 128 x 64 pixels
  • Asset Storage: 100 digital assets simultaneously
  • Native Support: 22 cryptocurrencies
  • Total Support: 1,100+ cryptocurrencies
  • External Wallet Support: 55+ wallets
  • Asset Recovery: 24-word sentence restores the account
  • Color: Black
  • OS Compatibility: PC, Mac, Linux, Android, and iOS
  • Security: PIN code, recovery sentence
  • Other: Bluetooth enabled (encrypted)
  • Certification: Certified Secure Element (CC EAL5+)

Prague-based Trezor was the first to offer a hardware wallet, and at the time of writing offers two wallets. Trezor manufactures its wallets in the Czech Republic and is 100% open source.

The Trezor One debuted in 2014 to much fanfare and excitement. It was the first hardware wallet for consumers. This is a tried-and-true hardware wallet that sells at a fair price. For consumers looking for a standard hardware wallet, the original Trezor One won’t disappoint.

Features:

  • Size: 2.4in x 1.2in x 0.2in
  • Screen Size: OLED, 128 × 64 pixels
  • Native Support: 14 cryptocurrencies
  • Total Support: 1000+ cryptocurrencies
  • External Wallet Support: Many
  • Asset Recovery: 12-word to 24-word sentence restores account
  • Color: Black or white
  • OS Compatibility: PC, Mac, Linux, and Android
  • Security: PIN code, passphrase, recovery sentence
  • Other: Password manager; FIDO/U2F compatible
  • Certification: None

The Trezor Model T is a second-generation hardware wallet released in 2018. It builds upon the Trezor One’s strengths and is fully open source. This hardware wallet has dispensed with the OLED screen and buttons in favor of an LCD touchscreen. The Trezor Model T also includes a MicroSD slot, uncommon for hardware wallets.

Features:

  • Size: 2.52in x 1.54in x 0.39in
  • Screen Size: Full-color LCD touchscreen, 240 x 240 pixels
  • Native Support: 50+ cryptocurrencies
  • Total Support: 1000+ cryptocurrencies
  • External Wallet Support: Many
  • Asset Recovery: 12-word to 24-word sentence restores account
  • Color: Black
  • OS Compatibility: PC, Mac, Linux, and Android
  • Security: PIN code, passphrase, recovery sentence
  • Other: Can function as both a cold and hot wallet; functionality for GPG encryption and U2F authentication
  • Certification: None

Ledger vs. Trezor

Both the Ledger and the Trezor have made it much easier to securely store private keys. However, while the two are very similar, they also have their differences. We will briefly compare and contrast their features so you know which one suits you.

Security

There has not been any reported case where Trezor or Ledger has failed to protect people’s data. Both of them require a password and the seed phrase to let you access your crypto wallet. The only way you can be vulnerable is if you write your seed phrase on a computer or other smart device that gets hacked. So both the Ledger and Trezor are safe to use.

There is, however, a minor disadvantage to Ledger. You cannot actually see what code goes into the ledger, as it is not open source.

Unlike Ledger, Trezor is open source, which allows people to see the source codes and redistribute or modify them. This means bugs can be identified more easily, but there is a slightly enhanced security risk.

Ease of Use

Both Ledger and Trezor are very simple to use. The older models, Trezor One and Ledger Nano S, have a two-button system. Once you learn how to control it, it is very easy to access your crypto wallet.

In addition to Ledger Nano S, Ledger Nano X also has a two-button system.

Trezor Model T, on the other hand, is free of buttons and has a touch screen. It is much easier to use when compared to the two-button version.

So, the Trezor Model T has the upper hand when it comes to ease of use.

Price

Price plays a key role when you want to decide which brand to buy.

Ledger Nano S costs around $59, while Trezor One costs around $55. The difference between the two is minor.

The upgraded models are certainly more expensive. While Ledger Nano X costs about $120, Trezor Model T costs around $170. The difference in price between the pair is greater than with the older models. However, Trezor Model T does not have any major advantages over Ledger Nano X to justify this difference.

Moreover, Ledger Nano X offers Bluetooth communication, and Trezor does not. So the approximately $50 difference in price is not reasonable.

In terms of price, buying Ledger is better than buying Trezor.

Affiliate Disclaimer: This description contains affiliate links. If you decide to purchase a product through one of them, I receive a small commission at no cost to you.

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