The importance of using a hardware wallet
One of the key things that I try and get across to people who are jumping into cryptocurrency, is the importance of investing in a hardware wallet. A hardware wallet is like a thumb drive or similar-sized device, that will store your secret pass phrases offline. So this means that you can leave the hardware wallet connected to your computer unlocked. And no one can access the secret passphrase through the internet or your computer, without having physical access to the unlocked device itself.
I know I shouldn’t have to say this, but never give your secret passphrase to anyone, not even your spouse… No one will ever need to have your secret passphrase. Don’t ever put your secret passphrase into anything unless you are 100% certain you know what you are doing.
Your secret passphrase is like your security key to your crypto wallet if anyone were to get ahold of your secret passphrase. Your cryptocurrency portfolio holdings would be gone, and you would have essentially burned your crypto wallet. I have heard many stories of people who have already thousands of dollars worth of cryptocurrency from not using a hardware wallet. They leave their cryptocurrencies in a web or app wallet. Which ends up becoming compromised through scams or fishing attacks. Basically, bad people doing bad things to steal your cryptocurrency. This is why it is extremely important to protect your secret passphrase, and the best way to do that is with a hardware wallet.
I got caught through a Facebook Ad scam, and burned my Exodus wallet…
The ad mentioned Exodus’s new Web Wallet. I put my secret passphrase into a site that looked just like exodus.com and nothing happen. I realized I was scammed… Luckily I had already moved my portfolio over to my hardware wallet, and only had 11 cents to lose.
I compromised the wallet, and I can never use it again.
And one of the great things about hardware wallets, they tend to give you access to hundreds of cryptocurrencies, with multiple blockchains. This means you don’t have to keep writing down, and or finding secret places to hide your passphrases, hardware wallets store them all in a safe place.
As of 2022, the most popular hardware wallets are:
- Ledger Nano S
- Ledger Nano X – I own this one!
- Trezor One
- Trezor Model T
Other hardware wallets, that I have heard of, but know nothing about:
- KeepKey
- Prokey
- Ellipal Titan
- SafePal S1
- D’CENT
- SecuX V20
- CoolWallet Pro
- Keystone Pro
- BitBox02
- Opolo
- Coldcard
- Satochip
- Archos
That’s the most up-to-date list I was able to find for hardware wallets. So really there is no excuse to not be able to find one. I have been involved with cryptocurrency for a year, and I just gave a friend a few words for not utilizing his ledger with a few handfuls of tokens. And I preach this to everyone who owns crypto, and or considering jumping into crypto…
GET YOUR SELF A HARDWARE WALLET AND USE IT!!!
I have owned a Ledger Nano X since July of 2021, and I must say, the only thing I dislike about using a hardware wallet, is having to sign every transaction or connection. This means you need to have the device, unlocked and connected to your computer to sign messages on the device. It can become cumbersome, which is why I tend to use a Web Wallet for many transactions at once, and then transfer holdings to the hardware wallet. I also use the web wallet, for giveaways and free airdrops to not have mysterious content dropping into my hardware wallet.
Unfortunately, it is a small price to pay to know that my cryptocurrency and NFTs are secure, and not have to worry about losing my portfolio to a horrible person.
I am also a firm believer in if you have over $500 in cryptocurrency, you should own a hardware wallet, I also don’t believe in keeping cryptocurrency on sites like Binance, Coinbase, Kucoin, Crypto.com or any other centralized exchange. Because sites can, and have been hacked for millions of dollars. These sites are also on centralized servers, meaning if those servers do get hacked, or the server decides to blow up one day, most of these records would be gone.
Not to say, you won’t be reimbursed as top centralized exchanges are insured, and have paid out from hacking attacks. But the whole concept behind cryptocurrency is that you are your own bank… So why should you be using these sites to hold your crypto, when a hardware wallet can do the exact same thing, and do it more securely?
A good rule of thumb for cryptocurrency, keep 80-90% of your holdings on a hardware wallet, and only 10-20% on a hot wallet. I keep everything on a hardware wallet unless it was sent to me and I don’t know if it is safe enough to store on my hardware wallet.
Do as I say, not as I do?
I spend way too much time in Twitter spaces, and I only ever hear people talking about Ledger and Trezor, so I can not really say much about the others in that list. I myself invested in a Ledger Nano X, which allows me access to almost every cryptocurrency through one chain or another. The supported list alone goes really deep into multiple currencies, so even if Ledger Live does not support a currency within the application, I can still connect the ledger device to a web wallet to have my secret keys secured through the ledger.
I am not going to go to much in-depth into why I choose ledger, that is something that you should do your own research on. But I will say, that when I decided to buy, I felt that Ledger had the most robust option at the time.
And I am not worried about my ledger breaking, or being destroyed… Because I can easily buy a new one and have my secret phrases transferred over to the new device.
The other thing that I would like to mention before closing this post is that, when you purchase a hardware wallet, there will be notices and stickers on the box. These are tamper-proof stickers. And you will want to pay close attention to the instructions when setting up. Sometimes if you don’t buy directly from Ledger or Trezor or any other company, you can come across one that has already been compromised.
This means the secret passphrase would have already been copied by someone making the device useless.
So please be careful, invest in a hardware wallet and reach out if you have any questions. I don’t give investment advice, or tell people what to buy, but I will help anyone trying to jump into cryptocurrency. I have spent an entire year learning everything I can about this amazing technology.
Do you own a hardware wallet, are you thinking of buying one?
Comment below, I would really love to hear your opinions on hardware wallets, who knows maybe we might save someone from losing their portfolio!
