The team behind dog-themed meme asset Shiba Inu (SHIB) is unveiling the preorder date for new SHIB-themed cold wallets. In a new announcement, Shiba Inu says that preorders for Tangem’s new SHIB-theme cold wallets will kick off May 29th. “SHIB Army! Tangem is about to unleash SHIB-themed cold wallets! These card-shaped vaults are set to […]
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As accusations are hurled at Ledger over a controversial update, one hardware wallet has decided to open-source its firmware. Others have turned it into a marketing opportunity.
Amid fallout over Ledger’s controversial decision to allow private keys to be “recovered” from its devices, cold storage competitor GridPlus has announced that it will move to “open source” the firmware of its crypto wallets.
GridPlus took to Twitter on May 17 to inform its 17,500 followers that it will open source the firmware of all its crypto devices in the third quarter of this year in what it claims is in a bid for greater transparency.
The most trusted name in cryptography, relied upon by the world's governments for their highest security applications for decades, sold products backdoored by the CIA. How can we ensure this won't happen again? Open-source software.
— GridPlus (@gridplus) May 18, 2023
GridPlus will open-source its firmware in Q3. pic.twitter.com/889OnqXd20
“This week's hardware wallet discussions laid bare trust assumptions taken for granted,” wrote GridPlus in a follow up comment.
“We as an industry must hold ourselves to the highest standards and we call on all other hardware wallet manufacturers to open-source their firmware as well for the benefit of our ecosystem.”
Much of the ire directed at Ledger over the last 48 hours stems from its firmware — a term for software that’s built into a hardware device — being updated that would allow the potential extraction of a user’s private key from their cold storage device, despite reportedly assuring users the opposite in the past.
Related: Ledger data leak: A ‘simple mistake’ exposed 270K crypto wallet buyers
Notably, Ledger’s firmware is closed source, meaning that only developers from the company itself can view the code and inspect it for flaws. Open source code on the other hand allows for any programmer to access and inspect pre-existing code to improve it and check it for potential errors.
Speaking directly to this point in a May 17 Q&A session on Twitter, Ledger Support clarified that it had “always been possible” for the company to write code that would allow for key extraction and users must trust in Ledger.
(1/2) Technically speaking it is and always has been possible to write firmware that facilitates key extraction. You have always trusted Ledger not to deploy such firmware whether you knew it or not.
— Ledger Support (@Ledger_Support) May 17, 2023
While Ledger’s announcement subverted many user’s understanding of the kind of privacy features its products offered, some have suggested that the outrage has been blown out of proportion.
Competitors appear to have been quick to capitalize on Ledger's poorly-received announcement, with some choosing to offer discounts across the bulk of their products including Trezor, Blockstream's Jade and BitBox.
Magazine: Ordinals turned Bitcoin into a worse version of Ethereum — Can we fix it?
To use a crypto hardware wallet, connect wallet to computer/mobile, enter PIN, follow instructions to send/receive crypto, then store safely offline for added security.
Investing in cryptocurrencies is widely known to be associated with risk, given the crypto market’s volatility, regulatory dilemmas and high-profile incidents of hacks, scams and fraudulent activities. According to Chainalysis’ midyear report on cryptocurrency-related crimes in 2022, approximately $1.9 billion worth of cryptocurrency was stolen in various hacking incidents and fraudulent activities compared to under $1.2 billion at the same point in 2021.
Safely storing and managing cryptocurrency assets has its own set of challenges, and traders must educate themselves on the best options. As a type of cold storage, a crypto hardware wallet is a physical device designed to securely store cryptocurrencies offline, providing additional layers of security for those who hold large amounts of crypto and want to keep their holdings safe for a long time.
This article will discuss what a hardware wallet is, how to use one and the benefits of hardware wallets vs. software wallets, and it will answer the lingering question: Should you keep your crypto coins in a hardware wallet? Additionally, there’s information on the available hardware wallets to store your crypto assets safely.
Related: How to mitigate the security risks associated with crypto payments
Crypto wallets can be broadly classified into two categories: hot wallets and cold wallets. Hot wallets are software-based crypto wallets connected to the internet, while cold wallets are physical devices. Cold wallets are considered a more secure storage option than hot software wallets, as they are not connected to the internet and do not interact with potentially vulnerable software and web viruses. Among cold wallets, hardware crypto wallets are considered one of the safest options to store cryptocurrencies.
A hardware wallet is a physical device typically resembling a USB drive or a small plugin device designed to securely store cryptocurrencies and other digital assets such as nonfungible tokens (NFTs). Hardware wallets do not actually store cryptocurrency; instead, they store the private keys that allow access to the stored digital assets.
One may check the price, model and specifications as per requirement. Bitcoin (BTC); Ether (ETH); stablecoins like Tether (USDT) and USD Coin (USDC); and other popular digital assets like Ripple’s XRP (XRP) and Litecoin (LTC) are supported by most hardware wallets.
While software wallets allow ease and convenience, hardware wallets are known for their secure storage. A good understanding of the differences among the two options, user requirements and the level of digital asset custody needed can help users make informed choices on their wallet preference.
Before understanding how a hardware wallet works, it is essential to have some know-how into crypto wallet keys.
Cryptocurrency data lives on the blockchain, and crypto wallets store this information. There is no hard money like fiat, and this data on the blockchain determines one’s ownership of the assets.
Every crypto wallet has a pair of keys to access it — a private key and a public key. The public key is akin to a bank account number and is free to access by anyone. The private key, however, is like an ATM pin code and must be secured by the user.
Private keys give access to the cryptocurrency funds and need to be safeguarded by the owner and should not be shared with anyone. They are a unique combination of letters and numbers, functioning as digital signatures or a password that grants access to and control over the cryptocurrency holdings. Hardware crypto wallets typically store these private keys, which are required for signing transactions.
When users hold their cryptocurrencies on a centralized exchange (CEX), they essentially transfer custody and control of their private keys and digital assets to the exchange while themselves using login credentials provided by the CEX. This implies that users rely on the exchange to securely hold and manage their funds on their behalf, making them vulnerable to scams, hacks and other security threats in the event an exchange comes under attack.
Hardware wallets, on the other hand, empower users with full control and self-custody over their digital assets. Users hold their private keys and are not reliant on third-party custodians or exchanges. To engage in cryptocurrency transactions using hardware wallets, the transactions require the private key to be “signed.” This signing process takes place within the hardware wallet itself using a cryptocurrency bridge. A crypto bridge facilitates the connection between the hardware wallet and the blockchain.
The hardware wallet uploads the signed transaction to the bridge, which in turn broadcasts the signed transaction to the blockchain network. Importantly, at no point during the entire process does the user’s private key leave the hardware wallet, thereby ensuring safety and security.
Related: What is a Bitcoin Wallet? A beginner's guide to storing BTC
The exact steps and procedures may vary slightly depending on the specific hardware wallet. Users can refer to the manufacturer’s instructions and follow security practices to learn how to use a particular hardware wallet.
The following are some common steps to understand how hardware wallets can be used:
Obtain a crypto hardware wallet from known and reliable manufacturers such as Ledger, Trezor and Ngrave — and/or their authorized resellers. Ensure that it is sealed and tamper-free. Visit the official website of the hardware wallet manufacturer, then download and install the wallet software on desktop/mobile devices. Make sure to read the recommendations for the device specifications — operating system, processor, etc.
Connect the hardware wallet to a desktop/mobile device using the provided USB cable or the appropriate wireless connection (bluetooth or NFC). Follow the on-screen instructions to initialize the hardware wallet. This involves selecting a PIN or passphrase, creating a backup recovery seed phrase and securely storing the seed in multiple offline locations. The recovery seed is crucial for restoring access to funds if the hardware wallet is ever lost or damaged.
Within the wallet software, locate the option to receive or deposit cryptocurrencies. Copy the public address displayed or scan the QR code in order to add the desired amount of cryptocurrency to this public address from an exchange or another wallet.
To send cryptocurrencies from the hardware wallet, select the option to send or transfer funds, and enter the recipient’s address and the amount to send. Confirm the transaction details on the hardware wallet’s screen.
Upon confirming the transaction details on the hardware wallet, one will be prompted to provide additional authorization by entering a PIN or passphrase. The hardware wallet will then sign the transaction with the private key stored within it, and the funds will be transacted. Track the progress of the transactions using blockchain explorers or within the wallet software. Verify that the transaction has been confirmed and added to the blockchain.
It is important to remember to securely disconnect the hardware wallet from the desktop/mobile device after completing the transaction and ensure safekeeping.
Hardware cryptocurrency wallets have become increasingly sought after by crypto enthusiasts, investors and crypto whales. These include wallets such as Ledger and Trezor, which offer a secure and user-friendly solution for storing and managing digital assets. Other common names in the market include: Ellipal, CoolWallet, SafePal and Ngrave, among others. Furthermore, certain hardware wallets like Ledger offer staking and other earning opportunities through their Ledger Live app.
The superiority of hardware wallets in securing cryptocurrencies became even more apparent in 2022 due to the crypto exchange debacles of FTX, Celsius, BlockFi and Vault, which resulted in the loss of access to billions of dollars. As a result, hardware wallet providers like Ledger and Trezor experienced unprecedented sales as crypto holders rushed for storage safety and reliability.
For anyone who has been in the crypto space long enough, there is a common saying: “Not your keys, not your crypto.” In essence, this phrase serves as a call to action for cryptocurrency users to take control of their own security and ensure the protection of their digital assets. It encourages the use of hardware wallets and other cold storage solutions to keep private keys offline and away from potential cyber threats.
Crypto hardware wallets are widely recognized as secure solutions for storing, managing and taking custody of one’s digital assets and cryptocurrencies. Although no security measure can guarantee complete safety, hardware wallets provide additional layers of security and safeguards for storing cryptocurrencies.
Retail trading giant Robinhood just introduced a new feature that will allow its users to skip previously necessary steps to reach and fund their accounts. During CoinDesk’s Consensus 2023 conference in Austin, Texas on Thursday, Robinhood Crypto general manager Johann Kerbrat announced the launch of Robinhood Connect, a crypto on-ramp that will allow users to […]
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Phantom, a leading self-custody wallet in the Solana (SOL) ecosystem, is reportedly expanding to support the Ethereum (ETH) and Polygon (MATIC) chains. Phantom told TechCrunch that it plans to support the Ethereum and Polygon blockchains beginning May 1st on both iOs and Android devices. Says Phantom, “The Phantom multi-chain is now available everywhere that MetaMask […]
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Prominent crypto wallet MetaMask is addressing recent reports of Ethereum (ETH) wallets being hacked for millions of dollars, saying that the attacks are not related to weaknesses in the company’s software. Earlier this week, Taylor Monahan, CEO of Ethereum-focused wallet MyCrypto, said in a lengthy thread that she had uncovered a “massive wallet draining operation,” […]
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Crypto wallet MetaMask is attempting to make it easier for customers to purchase digital assets with fiat, including by using credit or debit cards. In a statement, MetaMask says they are launching a new “Buy Crypto” feature for people to purchase cryptocurrencies in its Portfolio Dapp, where customers can see all their MetaMask accounts simultaneously. […]
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Ethereum’s new account abstraction features make crypto more user-friendly, but how hard is it to join the new network?
A new decentralized layer has been added on top of Ethereum to make smart accounts possible with the introduction of ERC-4337 and account abstraction — but infrastructure providers suggest it may be tricky to participate profitably right now.
ERC-4337, commonly called “smart accounts” or “account abstraction” was deployed on the Ethereum mainnet on March 1. “Smart accounts” are essentially a supercharged version of an Ethereum wallet. Although smart contract wallets already exist, they rely on centralized components. ERC-4337 changes that with a distributed network of “Bundlers” and “Paymasters.”
Under the hood, there are a few subtle but significant changes — namely the addition of the “User Intent Layer” — explained Matt Cutler, co-founder and CEO of Blocknative, a core Ethereum infrastructure provider.
According to Cutler, an Ethereum transaction today involves several discrete steps.
A user accesses their standard externally-owned account (EOA) or private key to compose a signed transaction — for example, transferring a nonfungible token (NFT) to another user.
This transaction is then sent to the public mempool — which could be described as a shared queue for transactions — to be plucked out by a “Builder” who organizes it into a “profitable block.” From there the block is proposed to a Validator who ultimately proposes and publishes it on-chain, completing the transaction.
Under ERC-4337, the new “User Intent Layer” is introduced before the current EOA step.
This additional layer allows a user to initiate more complex transactions in a single step. To make this possible, ERC-4337 introduces an “Alternative Mempool” and a network of transaction Bundlers, and along with it — a new way to earn fees.
A Bundler is a node that does a very similar job to the block “Builder.” Instead of organizing signed transactions from the public mempool to assemble a profitable block, a Bundler grabs User Operations, or userOps, from the Alt-Mempool to create the most profitable bundle which is signed and submitted to the network as a single transaction. This is all part of the newly added layer that makes smart accounts possible.
Bundlers get compensated via userOp gas fees for providing their much-needed service.
Will Account abstraction bring a billion people to crypto?
— John Rising (@johnrising_) March 24, 2023
NO. Solving a problem that billions of people have will bring a billion people to crypto.
Account abstraction enables the distribution of the solution.
While anyone can be a Bundler in theory, in reality, being a successful one might be another story, warned Cutler.
Like Builders, Bundlers are “specialized actors” made up of “relatively sophisticated development teams operating substantial computational, storage, and networking infrastructure,” he said.
“ERC-4337 is trustless and permissionless. So if you're technically adept, by all means, you can stand up and operate your own Bundler. The challenge is Bundling is a competitive market. So you will be competing against relatively sophisticated teams that are investing heavily into being a competitive Bundler,” he said.
“Bundlers are not the sort of tooling that you just stand up, forget about and it starts printing you money. We expect Bundling to be substantially more technically sophisticated than being a validator, for instance.”
Cutler noted there are already a number of open-source bundler code repositories.
Related: Ethereum ERC-4337 'smart accounts' launch at WalletCon: Account abstraction is here
There is an ongoing debate about whether ERC-4337 will have an impact on Ethereum gas fees, particularly given the increase in transaction complexity associated with the introduction of the new User Intent layer.
ERC-4337 and AA are all over the news, but with that comes a lot of misinformation. Here are some common misconceptions (and valid concerns): https://t.co/MkVoOvR44y
— ZeroDev (@zerodev_app) March 9, 2023
“While it is still too early to tell, my current expectation is that, on average, gas fees will not change all that much. If ERC-4337 has an impact, it's going to be pretty slight — either up or down. We do not expect transaction fees to suddenly go to zero, or suddenly become 100x more expensive,” said Cutler.
Magazine: ‘Account abstraction’ supercharges Ethereum wallets: Dummies guide
As of March 25, 2023, the U.S. government held 205,515 bitcoins worth $5.6 billion, which is approximately 1.06% of the circulating supply, according to current statistics. The cache of bitcoins is a result of three forfeitures that began in 2020. Glassnode’s on-chain data reveals that on March 9, about 9,860 bitcoins worth roughly $269 million […]
Microsoft, the software conglomerate, has introduced an Ethereum-based cryptocurrency wallet in the testing version of its Edge web browser. The new feature, which software sleuth Albacore discovered, is named “Crypto Wallet” and would allow users to store and transact Ethereum and Ethereum-based tokens in a non-custodial way, acting like a Metamask clone. Microsoft Introduces Ethereum […]