Hardware Wallet Practical Manual + Inventory: Safe and convenient to play with encryption applications
As the FTX incident continues to ferment, it is difficult to withdraw coins on multiple platforms, and centralized encrypted financial facilities are facing a serious crisis of trust. The phrase "Not your keys, Not your crypto" (no private key, no encryption ownership) of Bitcoin open source blockchain expert Andreas Antonopoulos is once again regarded as a canon.
Under the blessing of this creed, crypto players have withdrawn coins from exchanges to addresses on the chain one after another. According to the latest data from Glassnode, Bitcoin is currently flowing out of exchanges at a rate of 172,700 per month, exceeding the previous peak created after the sell-off in June 2022; The ratio reached 47.4%, the highest level so far this year.
More experienced users have also turned to non-custodial wallets, and hardware wallet manufacturers have benefited a lot from this round of coin withdrawals. For example, Ledger has set multiple record sales records in a short period of time, Trezor sales have soared 300%, OneKey monthly sales have increased by 1000%...
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1. Getting started with hardware wallets
The so-called hardware wallet refers to an encrypted wallet based on a hardware device, which stores the user's private key (key information used to authorize outgoing transactions on the blockchain network) in a secure hardware device, which can be accessed without an Internet connection. Also making it one of the safest options on the market.
For this experience, we chose the OneKey wallet under Bixin as an example (not an advertisement). The OneKey hardware wallet set is basically similar to other hardware wallets such as Ledger. It mainly includes the following contents: hardware wallet device, USB cable (mainly used to connect to a computer to import accounts), instruction manual, and two mnemonic cards (used to record mnemonic word).
Users first need to set a new address through the hardware wallet device. Turn on the device, select the number of mnemonics on the device (12 digits, 18 digits or 24 digits); use a paper document to transcribe the mnemonic words that appear on the device screen (appearing one by one), and then need to go through several random mnemonic word confirmation; set the device PIN code and confirm it; so far, the user's new address on the device has been generated.
Through the above address generation process, it can be found that the core point of ensuring the security of hardware devices is that the mnemonic is generated without connecting to the Internet, thereby reducing the risk of private key leakage. In contrast, the web wallets and APP wallets we often use need to be connected to the Internet, and some users are accustomed to taking screenshots with private keys or mnemonics, which further increases the risk of wallets.
However, although the hardware device has generated a new address (that is, the public key), it cannot be seen on the OneKey hardware device. Bixin told Odaily that the public key address display function will be added to subsequent versions of the device. At the current stage, users need to go to the OneKey official website to download the application and import the hardware wallet account for use. Specifically, after downloading the APP, the user needs to turn on Bluetooth to search for OneKey hardware devices, enter the pairing PIN code to complete the pairing, and finally import the account.
It should be noted that the address displayed on the APP for the first time starts with 0 x, and only supports EVM-based blockchains (Ethereum, BSC, polygon, etc.); if you need other public chain addresses such as Bitcoin and Solana, you must upgrade your wallet firmware to corresponding version. According to statistics, OneKey currently supports a total of 36 blockchains, basically covering all mainstream ecological tokens.
If you just want to use the hardware wallet as a cold wallet that is not connected to the Internet, you can delete the APP after obtaining the corresponding address, and then you only need to transfer coins to the relevant address - withdrawing coins from the wallet address requires device authorization.
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2. Dark pits of hardware wallets
Having a hardware wallet does not mean that assets are 100% guaranteed and foolproof. In fact, there are many dark pits in the use of hardware wallets.
The first of these is the leakage or loss of the private key. Wallet security protection finally returns to a core question: how to ensure the security of mnemonics? If it is not kept secret enough, it will be discovered and the assets will be stolen directly; if it is kept too hidden, it may be lost.
Recently, Shen Bo, the founder of Fenbushi Capital, had his personal wallet assets stolen, and the suspected private key was leaked, resulting in a loss of more than 40 million US dollars. Former Ripple chief technology officer Stephen Thomas once lost the private key of his IronKey hardware wallet, which contained more than 7,000 bitcoins.
Some players have summed up some methods for users to refer to. For example, word shifting or replacement, all a is replaced by b, or b is replaced by q, using your own encoding for conversion; or changing the mnemonic to something that does not look like a mnemonic, such as a poem; or even Some players called on the wallet team to develop a small program that allows customers to directly record Chinese characters and convert them to English at any time.
In addition to the way of hiding, the mnemonic itself may also have some security holes. Last year, some users reported that the original address could not be restored when the mnemonic words generated by OneKey were imported, and then OneKey urgently fixed the bug, saying that “no users suffered losses.” The Odaily test found that the current OneKey hardware device generates mnemonic words, which can restore the correct address in other third-party wallets. We have to pay attention to the lessons learned from the past. It is recommended that users reset the hardware wallet and then import it (or import a third-party hardware wallet) after generating the mnemonic to see if the original address can be restored; in addition, it is best to try to transfer out a small amount Assets, use the hardware wallet normally after all operations are correct.
The third problem in the use of hardware wallets is that fake apps tamper with account permissions. At present, most hardware wallets need to be used in conjunction with their own APP. When users download for the first time, they can scan the QR code of the manual to enter the official website to download. Although the mnemonic phrase is not required during the entire network import process, the author believes that this operation still increases the danger of hardware wallets.
Especially in the subsequent use (the APP was deleted after changing the phone), some users directly search for the APP on the webpage or the application store for convenience, which also leaves an opportunity for attackers. Some users reported that after using Imtoken to transfer money, they found that their account permissions were blocked, and they needed another address to authorize at the same time; before this user had directly downloaded the program (fake APP) on the web page, and accidentally touched it to a stranger when importing the account. The address is authorized.
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3. Which hardware wallets are available?
At present, there are dozens of hardware wallet manufacturers in the market, ranging from individual consumers to enterprise users. The wallet cases below are representative to a certain extent. Interested users can choose a hardware wallet that suits them.
（ 1 ）Ledger
Bitcoin hardware wallet maker Ledger is one of the technology leaders in digital currency security, providing consumers and businesses with trusted hardware. The Ledger wallet has occupied the position of the two best-selling hardware wallets in the world for many years. It currently has two products, the Ledger Nano X ($119 per unit) and the NANO S PLUS ($88 per unit), as well as a combination package for home users.
The Ledger hardware wallet supports 27 cryptocurrencies and over 1,500 assets such as BTC, ETH, XRP, and XLM, among others. When users view the wallet and send transactions, the hardware wallet needs to be used in conjunction with the software wallet, which can be used on Windows, macOS and Linux devices, as well as iOS and Android mobile devices; it is also equipped with a USB Type-C cable and Bluetooth to enable the device to connect Easier and faster. Based on their hardware devices, users also use software wallets developed by other teams, such as MyEtherWallet, MetaMask, etc.
（ 2 ）Trezor
Trezor is a high-tech data encryption storage. This product is made in Czech Republic. This brand is recognized in the industry as the earliest, most prudent and safest encrypted storage. It is a reliable brand that has been verified by global digital currency players. The company has excellent records and rich software support. Trezor's security model is based on the principles of zero trust. The principle of zero trust is to assume that any part of the security system may be successfully attacked.
Trezor has two wallets under its umbrella: the Trezor Model T ($181) and the Trezor Model ONE ($46), which sold more than 300,000 units and the Trezor Model ONE ($46), which sold 75,000.
Take the Trezor Model T, for example, which supports more than 1,200 cryptocurrencies, also comes with a USB Type-C cable to connect to a computer or smartphone, and supports various apps and software. Best of all, the Trezor Model T has a touchscreen, perfect for beginners, and a MicroSD card slot that can be used to encrypt a PIN. On the downside, the product app doesn't currently support iOS and Windows phones.
（ 3 ）OneKey
Currently, OneKey has OneKey Classic ($89), OneKey Mini ($58), OneKey Lite ($19.99) and OneKey Keytag ($59). OneKey hardware wallet currently supports 36 blockchains, basically covering all mainstream ecological tokens; compatible with OneKey plug-in and MetaMask to connect hardware wallets to participate in DeFi, it is a necessary hardware wallet for users to participate in DeFi. OneKey founder Wang Yishi once said that OneKey will continue to add about 40 new chains every year, covering all public chains in the market in the shortest possible time, and helping users pledge and store their encrypted assets and NFT.
In September this year, OneKey announced the completion of a round of financing of approximately US$20 million, led by Dragonfly and Ribbit Capital, with participation from Framework Ventures, Sky 9 Capital, Folius Ventures, Ethereal Ventures, Coinbase, Santiagoroel, and Fishkiller.
（ 4 ）Keystone
Keystone is the official cooperative hardware wallet of MetaMask, and it can also adapt to other mainstream software wallets such as Solflare, Sender Wallet, XRP Toolkit, etc. It is an old-fashioned hardware wallet. The Standard Edition (Essential) and Professional Edition (Pro) are priced at $119 and $169, respectively.
Keystone Wallet was founded by Lixin Liu, formerly known as Cobo Vault. Lixin Liu left Cobo on June 1, 2021 to continue the development of Keystone Wallet.
（ 5 ）BitBox
The BitBox wallet is designed in Switzerland and is known as one of the best cryptocurrency hardware wallets for beginners. There are currently two versions of BitBox: the Multi version that supports multiple cryptocurrencies and the Bitcoin-only version that is only for BTC, and the price is the same at $133.
It uses capacitive touch sensors for device interaction and use. BitBox 02 also features a simple backup and restore feature, using a microSD card to manage backups instantly from within the device. It also provides the option to display a 24-word recovery word or a seed phrase to the user.
BitBox is also equipped with U2F support and a security chip, which protects the device and cryptocurrency funds from physical tampering, and is compatible with Windows, macOS, Linux and Android devices.
（ 6 ）KeepKey
KeepKey is a hardware wallet developed by KeepKey Company, priced at $49. The company acquired web trading platform ShapeShift in 2017. Therefore, the main function of KeepKey is to integrate with ShapeShift. Although deeply integrated with ShapeShift, users can still use other wallet software.
While the native ShapeShift integration is a big plus, KeepKey also has its downsides. To trade assets on Shapeshift, you should register an account and complete KYC verification. If you only want to send and receive cryptocurrencies, you only need to register an account with your email address. If you don't want to create a Shapeshift account at all, users can use the browser plug-in of the KeepKey client to use its basic functions or choose other cryptocurrency wallet software.
（ 7 ）SafePal
As a rookie in the hardware wallet market, SafePal is supported by institutions such as Binance Incubator, Trust Wallet, and Litecoin Foundation.
It currently has SafePal S 1, priced at $ 39.9. The wallet, which resembles an MP3 player, has a camera that scans QR codes when signing transactions. Aside from charging the battery and receiving updates, the SafePal doesn't require any wired connections. The devices are hardly connected to the Internet, blocking many attack vectors. However, the user experience is also affected, and the payment process is relatively cumbersome. Users pair the wallet with a smartphone app, and the two communicate information via a QR code. However, according to user feedback, SafePal is relatively fragile, and users should carefully back up their mnemonic phrases.
（ 8 ）NGRAVE
NGRAVE provides a complete self-custody solution, including ZERO, a connectionless and highest security certified (EAL 7 ) hardware wallet, LIQUID, a mobile application that connects users to the blockchain in real time, and GRAPHENE, an encrypted and recoverable key backup. ZERO has a beautiful appearance and is equipped with a touch screen. The price is also slightly higher. The official price is 398 euros.
Just this month, Binance Labs announced a strategic investment in hardware wallet manufacturer NGRAVE, and will lead its upcoming A-round financing. According to Odaily news, in January this year, NGRAVE completed a $6 million seed round of financing, with participation from Woodstock Fund, Morningstar Ventures, DFG, Spark Digital Capital, Moonrock Capital, and Mapleblock Capital.
