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One of the most important aspects of cryptocurrency investing is security. No matter how much crypto you hold, it is important to protect your assets from cyber theft. One of the most effective ways to keep your crypto assets safe is by using a hardware wallet to store your private keys.
This guide covers what a hardware wallet is as well as lists some of the best hardware wallets available in Australia.
What is a hardware wallet?
A hardware wallet is a small physical device used for cold storage. Hardware wallets isolate your private key from the internet, as opposed to other types of wallets (e.g., web and mobile wallets) that can be solely accessed online.
There are two methods of storing crypto, hardware wallets are a type of “cold storage” that stores cryptocurrency offline. Hardware wallets are not the only form of cold storage, private keys can also be stored on paper and steel wallets. “Hot storage” methods are internet-connected digital wallets. Cold storage mitigates your exposure to the vulnerabilities like cyber theft, that online storage methods are susceptible to.
The biggest advantage of securing your crypto in cold storage is private key maintenance and ownership.
Public and private keys
Crypto wallets are used to store public and private keys that allow users to interact with blockchain networks. They allow people to send and receive cryptocurrency safely and without requiring a third party to validate the transaction.
Public keys are essentially a shareable wallet address that is paired with a private key. People can use public keys to facilitate transactions of funds between two accounts.
Private keys on the other hand work differently to public keys. A private key is a data snippet read by a computer, to access a digital wallet. Private keys are usually displayed in this form:
EA57361F201WOFHCYR74204HDA3F4478FDBSWU8333898A
They can also be presented a “seeded phrase”, which is a series of 12-24 words, generated by your crypto wallet. An example of a seeded phrase is:
Pizza Shelf Top Book See Feet Clue Stencil Small Fish Mouse
The owner the wallet should never disclose the private key or seed phrase to his or her wallet as this essentially gives them full access to the crypto within it.
Best hardware wallets available
Ledger Nano X
Price (AUD): $249.00
Supported cryptocurrencies: 1350+ cryptocurrencies
Ledger Nano X is one of the best crypto hardware wallets available from reputable digital wallet company, Ledger. This hardware wallet supports an array of cryptocurrencies and digital tokens. The Nano X is connected to PC devices via Bluetooth or wired connection. The Nano X has a LED screen displaying payment validation info and a PIN number for convenience and security. Other features include:
- USB type-C connector
- NFT management
- Secure chip (CC EAL5+)
- PIN Protected with a backup
How to use a Ledger Nano X
Setting up a Nano X is relatively simple. All you have to do is plug it into your laptop or computer, or use Bluetooth and download the Ledger Live App. Then set up your device’s PIN and recovery code. Once you have set the device up you will be able to generate a private key or seed phrase using the Ledger Live app.
Ledger Nano S
Price (AUD): $109.00
Supported cryptocurrencies: 1330+
The Nano S is one of the top-rated hardware crypto wallets in Australia. It gained popularity due to its ease of use, sleek design and security reputation. The Nano S is the older model from Ledger, which is considered to be one of the best crypto wallet companies around. The Nano S is roughly half the price of its newer counterpart, so it may be more appealing for people on a budget. The Nano S includes features like:
- Support for up to 18 coins
- USB type-B connector
- Wire connection
- No battery
- Pin Protected with a backup
How to use a Ledger Nano S
The set-up for the Nano S follows the same steps as the Ledger Nano X. Simply plug the device into your computer using the chord that comes with it and then download the Ledger Live app. Follow the steps presented on the app and then generate your private key. Once set up, you can manage your crypto through the Ledger Live app, letting you buy, sell and trade your assets directly through the app.
Trezor Model T
Price (AUD): $280.00
supported cryptocurrencies: 1280+
The Trezor Model T is the newest hardware wallet from the hardware wallet company, Trezor wallet. The Model T is able to protect all leading digital currencies like Bitcoin, Ethereum and an array of altcoins from hacking and theft. The biggest difference between the Model T and the previous Trezor One wallet is the colour touchscreen. Other features include:
- Supports MicroSD card
- Improved processing
- Network-isolated authentication
How to use a Trezor Model T
Setting up your Trezor Model T is a quick 10-minute process. You will first need to connect the device to your computer using the cable provided, then download the Trezor App. Once downloaded, set up the device’s PIN through the app to access your wallet. Once set up you will be able to access all your cryptocurrency wallets.
KeepKey
Price (AUD): $149.00
Supported cryptocurrencies: 40+
Keepkey is a hardware wallet brought to you by Shapeshift. One of the benefits of KeepKey is its in-browser wallet management tool, allowing users to quickly exchange cryptocurrencies. The KeepKey is great for anyone on a budget as it is one of the cheaper hardware options on this list but still has an array of handy features including:
- PIN protection
- customisable transaction speeds
- limitless wallet address support
How to use a KeepKey
To set up your KeepKey, all you need to do is head to Beta Shapeshift, which is Shapeshifts in-browser wallet management tool. Then plug the device into you computer and select the connect wallet icon that will appear at the top of the screen. You will then be able to pair the device to the Beta Shapeshift and connect your crypto wallets to you KeepKey.
SafePal
Price (AUD): $70
Support cryptocurrencies: 33
SafePal is a hardware wallet with an in-built camera used for scanning QR codes. SafePal is designed to make securely stored assets easily accessible through their SafePal App. Feature include:
- EAL 5+ independent secure element
- Multiple layers of security sensor
- Unlimited currency storage
How to use a SafePal
Setting up a SafePal hardware wallet is a little bit different to the other wallets on this list. To set up your SafePal you will need to download the SafePal mobile app from either to App Store of Google Play Store. You will then need to set up a software wallet through your mobile device before connecting your hardware wallet to your SafePal software wallet. Once connected you will be able to set up a device PIN and generate a private key using the device.
Other types of cold storage
While hardware wallets are the most common and secure forms of cold storage. There are several other types of cold storage used to protect digital assets.
Paper Wallets
A paper wallet is a printed piece of paper that contains a digital wallet private key or a QR that can be scanned to reveal the private key. Paper wallets are considered the least secure type of crypto wallet, as they can be easily damaged or destroyed.
Steel Wallets
Steel wallets are cold storage devices designed to be an indestructible version of paper wallets. With a steel wallet, your private keys and seed phrases are engraved into a piece of metal that is resistant to any form of damage including fire, corrosion, and rust.
What are Hot wallets
How wallets or hot storage is another cryptocurrency storage method that is always connected to the internet or crypto exchange. The benefit of a hot wallet is that your cryptocurrency can be accessed at all times without the need for any type of hardware, meaning you can quickly send and receive Bitcoin from your Bitcoin wallet. This means that crypto can be traded, sent, received and stored conveniently. Types of hot wallets include:
- Software wallets
- Mobile wallets
- Exchange wallets
Despite the convenience of hot wallets, they are considered less secure than hardware wallet as they are more prone to cyber theft and scams.
In Summary
Hardware wallets are considered the most secure form of digital asset storage. While online storage options are great for conveniently accessing your crypto, they can leave your wallet vulnerable to cyber-attacks, especially if you don’t have Two-Factor Authentication or a secure password set up. Hardware wallet options like the Ledger and Trezor allow you to maintain control over your cryptocurrency and keep your assets offline.
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