When it comes to cryptocurrency security, hardware wallets are the way to go. Two of the biggest names in cryptocurrency hardware are the Trezor and the Ledger Nano S. Other options include the KeepKey which is based on Trezor source code.
How Hardware Wallets Work
Hardware wallets are effective because the data is not kept online. When any form of information is kept online, it is a free-for-all feast for hackers across the globe.
There are people whose “profession” is to hack sites and this is what they do. Of course, if your data is not kept on the internet there is nothing for them to hack, which is the main reason hardware wallets work.
Every wallet has a recovery seed, typically a string of 24 words. If hackers have your seed then they have your funds.
This recovery seed is kept on your hardware device, so hackers need your device to gain access to your recovery seed. Your hardware wallet is also protected by a pin, so hackers will need access to this also.
All transactions need to be verified by your device before sending. In other words, the only real way to lose your funds with a hardware wallet is by being held up at gunpoint where you are forced to divulge your pin and hand over your hardware device. Some wallets, such as the Trezor, even have a security feature that limits this method of theft.
The Trezor is the original hardware wallet, and this is what it brands itself as. It was released in 2014 and created by Satoshi Labs, a Czech startup.
It has a solid reputation as the most secure hardware wallet available. This is because of an extra security feature known as multi phrase support.
Along with the 24 word seed, Trezor grants users the option to include an extra phrase which acts as a unique identifier for a particular wallet. So if you are held up at gunpoint, you give your assailants this phrase to a wallet with a tiny amount of funds in it.
Your hackers will have no way of accessing your real account as it is essentially hidden without knowing the extra phrase. This is quite ingenious, and is not to be found on the Ledger Nano S or other hardware devices.
The design and user interface of the Trezor is somewhat lacking. It is quite easy to setup but it lacks a sense of modernity and trendiness found in other wallets.
But this is by design, as it is supposed to look ordinary and square, like a vault. It is more of a functional wallet compared to the Ledger Nano S and the KeepKey hardware wallet.
The Trezor has more integration with cryptocurrency marketplaces and cryptocurrency payment processors than any other hardware wallet. These include Bitstamp. Bitpay, Bitex, Coinpayments and Bitwala.
Additionally, the Trezor works on all major browsers as opposed to the Ledger Nano S, which needs Chrome to function. The Trezor retails at $99.
Ledger Nano S
In terms of design, the Ledger Nano S has the edge on the Trezor. It has a metal case that makes it more durable as well as more modern, as opposed to the plastic, square design of the Trezor.
It is a little easier to set up and navigate than the Trezor, though not by much. The Ledger Nano S is a little sleeker than the Trezor.
The Ledger Nano S was released in 2016 and the Ledger company was founded in France in 2015. The other product sold by Ledger is the Ledger Blue, which is more expensive. The source code of the Ledger Nano S is open, though it does have two proprietary chips of which the code is not disclosed.
More than 3 incorrect attempts at the pin for this device will result in a reset where all data is wiped. This can later be recovered. The Nano requires Google Chrome or Chromium to set up.
The Ledger Nano S is compatible with Mycelium, GreenBits, Electrum, MyEtherWallet, Copay and Bitgo. The Ledger Nano S is frequently out of stock on the official website.
The Ledger Nano S currently supports 24 cryptocurrencies which is far more than the Trezor. However, the Ledger Nano S can only hold 5 applications due to memory requirements. This means you can really only trade 4 cryptocurrencies at a time, as you need to hold an application manager to download applications.
If you want to send a cryptocurrency you may need to download a particular application, which many find inconvenient. Because of this it can be said that cryptocurrency support between the Trezor and the Ledger Nano S is a tie.
Trezor v Ledger Nano S Summary
Both wallets are about the same size and will fit into your pocket quite easily. Both have two buttons that need to be physically pressed in order to verify transactions.
Both store your 24-word recovery phrase and are immune to brute force attacks and keylogging software. Both are practically the same price, Trezor retailing at $99 with the Ledger Nano S retailing at around $95.
The Trezor is a little more secure with its multi phrase support. It has been around longer and is integrated with more wallets, exchanges and payment processors.
The Ledger Nano S looks better and provides a slightly better user experience. It also supports more cryptocurrencies, though you can only use 4 at a time without having to download applications for each cryptocurrency, which can be quite inconvenient.
Overall there is little difference between the two. The Trezor is probably the most secure, though realistically there is still only a tiny chance of getting hacked with a Ledger Nano S. There is enough of a market share for both hardware wallets.
Trezor is orientated more towards security professionals who are concerned with protection above all else. For those who like pretty interfaces, the Ledger Nano S might be a better selection.
Last update on 2018-07-20 / Affiliate links / Images from Amazon Product Advertising API