The importance of using a hardware wallet

Best Hardware Wallets In 2021

One of the key messages I emphasize to cryptocurrency newcomers is the importance of investing in a hardware wallet. Essentially, it’s a compact device, simular to a thumb drive, designed to safeguard your secret passphrase offline. This means you can leave it connected to your computer, unlocked, without fear of anyone accessing your secret passphrase via the internet or your computer unless they physically possess the unlocked device.

I cannot stress this enough: never share your secret passphrase with anyone, not even your spouse. There should never be a reason for anyone to have access to it. Exercise extreme caution when inputting your secret passphrase; only do so if you’re absolutely certain about the legitimacy of the context.

One way to store a secret passphrase

Your secret passphrase serves as the key to your crypto wallet; if it falls into the wrong hands, your crypto holdings could vanish. Many unfortunate tales circulate about people losing substantial sums of cryptocurrency due to not using a hardware wallet. They opt to store their assets in web or app wallets, often falling prey to scams or phishing attacks. These malicious activities underscore the critical importance of safeguarding your secret passphrase, with a hardware wallet being the best solution.

I personally experienced a Facebook Ad scam that compromised my Exodus wallet. The ad mentioned Exodus’s new Web Wallet, and I entered my secret passphrase on a site that appeared identical to exodus.com. Realizing I had been scammed, I was fortunate to have already moved my portfolio to my hardware wallet, losing only 11 cents in the process. My compromised wallet is now unusable.

The hardware wallet

Hardware wallets offer the advantage of providing access to numerous cryptocurrencies across multiple blockchains, eliminating the need to remember or store passphrases separately.

Ledger

Some popular hardware wallet options as of 2022 include:

Ledger

  • Ledger Nano S
  • Ledger Nano X – I own this one!

Trezor

  • Trezor One
  • Trezor Model T
Trezor One

There are also other hardware wallets available, although I have limited knowledge about them:

  • KeepKey
  • Prokey
  • Ellipal Titan
  • SafePal S1
  • D’CENT
  • SecuX V20
  • CoolWallet Pro
  • Keystone Pro
  • BitBox02
  • Opolo
  • Coldcard
  • Satochip
  • Archos

Finding a hardware wallet should be straightforward given this list. Having been involved in cryptocurrency for a year, I consistently advocate for the use of hardware wallets to anyone owning or considering entering the world of crypto.

GET YOURSELF A HARDWARE WALLET AND UTILIZE IT!!!

I’ve owned a Ledger Nano X since July 2021. The only downside is having to sign every transaction or connection, which requires the device to be unlocked and connected to your computer. To streamline multiple transactions, I use a web wallet and later transfer holdings to the hardware wallet. Web wallets also come in handy for giveaways and free airdrops, preventing unfamiliar content from entering my hardware wallet.

Despite this minor inconvenience, it’s a small price to pay for the peace of mind that my cryptocurrencies and NFTs are secure, guarding against potential portfolio loss to malicious actors.

I firmly believe that if you hold over $500 in cryptocurrency, you should own a hardware wallet. I also discourage keeping cryptocurrency on centralized exchanges like Binance, Coinbase, Kucoin, Crypto.com, or others, due to hacking risks. These platforms rely on centralized servers, which, if compromised, could result in substantial data loss.

Cryptocurrency is about being your own bank, so why entrust your assets to these platforms when a hardware wallet offers greater security and control? A general guideline is to keep 80-90% of your holdings on a hardware wallet and only 10-20% on a hot wallet.

I admit I spend a significant amount of time in X spaces (formally Twitter Spaces), where Ledger and Trezor are commonly discussed. Therefore, I can’t provide much insight into the other hardware wallets listed. When I decided to purchase, Ledger appeared to offer the most robust option at the time.

I’m not concerned about my Ledger breaking or being destroyed since I can easily purchase a new one and transfer my secret phrases to the new device.

Closing thoughts

Before concluding, I want to mention that when you buy a hardware wallet, you’ll notice tamper-proof stickers on the box. Pay close attention to setup instructions, especially if you didn’t buy directly from the manufacturer. There have been instances of tampering, where the secret passphrase was copied, rendering the device useless.

Please exercise caution, invest in a hardware wallet, and feel free to reach out with any questions. While I don’t provide investment advice, I’m more than willing to assist anyone looking to enter the world of cryptocurrency. I’ve spent a year immersing myself in this remarkable technology.

Do you own a hardware wallet or are you considering getting one? Share your thoughts and experiences in the comments; together, we can help others safeguard their portfolios.


Question

Do you own a hardware wallet or are you considering getting one? Share your thoughts and experiences in the comments; together, we can help others safeguard their portfolios.




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