Cryptocurrency hardware wallets are often touted as the most sophisticated level of security to store the notorious digital assets. However, for someone who has been in the crypto industry for slightly more than a year, I never really felt the need to purchase a $100 external device to store assets which are virtually intangible. I’m sure there’s hundreds or thousands of people just like me who might feel comfortable about storing their crypto-assets with exchanges or their wallets and I wouldn’t blame them one bit.
Unfortunately, however, most often things are far from normal in the Wild West of cryptocurrencies. Ignoring the obvious outliers like Craig Wright’s eccentric antics or McAfee’s CIA-esque cryptic video snippets on Twitter, the general lack of regulations and the laissez-faire nature of the emerging market has put the onus on investors and customers to be heir own best custodian.
Investors usually tend to store their assets on exchanges because they assume their assets would be legally protected or, at worse, there would be at least some kind of regulatory mechanism in existence that would make the exchange legally liable in case of an orchestrated theft. But such is not the case, at least in the majority of the jurisdictions.
The labyrinthine tale of the now-defunct cryptocurrency exchange QuadrigaCX is a testimony to how haywire things can get in a blink of an eye. In a similar fashion, recently, one of the world’s largest cryptocurrency exchanges by reported trading volume Binance fell victim to a well-disciplined hack attack that resulted in the loss of approximately $40 million worth of bitcoin (BTC). And although the exchange was able to make up for the loss from its emergency fund designed particularly for such extraordinary events, it must be considered that not all exchanges have pockets as deep as Binance.
Why Should I buy a Crypto Hardware Wallet?
For me, personally, the reasons for purchasing a crypto hardware wallet were twofold.
First, it was the two days long “maintenance” of one of India’s leading cryptocurrency exchanges. I won’t divulge the exchange’s name, but it is safe to say that those days were probably the longest ones in my recent memory. Rumors started running rife on Twitter and other social media platforms that the exchange had been compromised or that it had pulled an exit scam amid India’s ambiguous regulations. Put mildly, my mind was in a state equivalent to Alex Jones on Grade-A coke tearing up one of his “NASA is evil” t-shirts.
The other reason, and probably the more impactful one, was a report by a publication that suggested that merely holding cryptocurrencies could result in a jail sentence of as much as ten years. As the report was not complete and intentionally tried to hide certain key points of the suggested draft bill, I won’t promote or link it to the article. Still though, the 0.001 percent chance of landing in jail for holding “internet money” didn’t sound particularly appealing to me. I wanted to hold my own assets. I wanted to be the sole custodian of my virtual money. I now wanted my own Ledger Nano S.
The First Look and Setting Up the Ledger Nano S
First things first, the unit is an absolute beauty. While unpacking Ledger Nano S, you’d hardly be able to differentiate it from a regular USB device. The simple and sleek look of the wallet gives it a premium feel.
The wallet comes with a USB cable, three cards to write your seed phrase in, instruction manual, and a few other accessories.
Booting the device for the first time is no Herculean task. Just connect the wallet to your computer with the USB cable and press the two buttons at its top simultaneously until it asks you to set up a PIN. Enter a PIN of your choice and confirm it again. The PIN ensures that only you are able to access the wallet.
Once the PIN is set up, you will receive a 24-word seed phrase. This is, undoubtedly, the most important step of setting up the device. Note down the 24 words on the three sheets provided along with the Nano S and ensure that you store them in extreme privacy at locations known only to you. Oh, and do not make the mistake of saving the phrase on your desktop. You’ll likely lose all your holdings if you do that.
Once the seed phrase has been jotted down, the only remaining step is to download and install the Ledger Live app. The super easy interface of the app will help you keep track of all your holdings and also enable you to send and receive an array of Ledger supported cryptocurrencies.
Cryptocurrencies supported by Ledger Nano S
As the Nano S model is one of the oldest and reputed hardware cryptocurrency wallets in existence, it offers support for a wide array of cryptocurrencies. Some of the major digital currencies supported by Ledger are bitcoin, ether, XRP, litecoin, bitcoin cash, monero, dogecoin, zcash, and dash, among hundreds of others.
It’s important to note that while setting up wallets for bitcoin and ether, the Ledger Live app will throw up a pop up asking you to select the appropriate blockchain you’d like to record your transactions on. If you’d like to send and receive bitcoin, select the “bitcoin” tab rather than the “bitcoin cash” tab. Similarly, in the case of ether, choose the “ethereum” tab and not the “ethereum classic” tab.
Other Interesting Titbits
The Ledger Live app also gives you extra options like choosing the reference exchange for cryptocurrency prices, the currency you’d like to view your portfolio’s worth, and so on. You can also choose to view your portfolio performance on weekly, monthly, and year terms.
Another striking feature I noticed while transacting through the wallet was that it generated a different BTC wallet address after every transaction. A bit of search on the Internet forums helped me understand that Ledger generates a new BTC address for you after every transaction so you have complete control over the privacy of your holdings. Doesn’t really get more cyberpunk than this, right?
The concept of cryptocurrencies is a fairly novel one and that of cryptocurrency hard wallets, even more. However, while setting up a seemingly complex device to secure my virtual assets, I didn’t face a single issue. For a price tag of roughly $100, Ledger’s Nano S is a must-buy if you hold crypto assets worth more than you can afford to lose.