Ledger is a brand of crypto hardware wallets. They are among the most trusted in the industry and were responsible for bringing the first hardware wallets to market. In the years since Ledger’s debut, many other wallet makers have hit the scene. But the Ledger name is still synonymous with secure crypto hardware wallets. In this piece, we explore what a Ledger wallet is and how does Ledger work with regards to the existing Ledger wallets.
Ledger Wallet
Ledger was launched in 2014 by a French company with the same name. The company was founded to find an optimal solution for securing private keys when performing transactions on a blockchain.
There have been different versions of the Ledger hardware. One of the most successful versions is the Ledger Nano S, released in 2016. The Ledger Nano S has been a huge success. It is still one of the most popular cold wallets on the market.
Following the Ledger Nano S, the Nano X was released in 2019. The Nano X is an advanced model of the Nano S, with improved features. Some of those features are more battery power, bluetooth communication (end-to-end encrypted), mobile usage, and a bigger screen.
Both models of the Ledger are still widely used, depending on the needs of the customer. If you are more likely to hold your cryptocurrencies in the long term, Ledger Nano S might be suitable for you. If you are a person who actively (daily) trades cryptocurrencies, then you might find Ledger Nano X to be the better choice.
How Does Ledger Work?
Ledger wallets are designed for newer users. Getting started is rather easy. The wallets require a separate application, also made by Ledger, to work. This app, called Ledger Live, lets users interact with their hardware wallet on a desktop or laptop computer.
The display of a Ledger crypto wallet has two parts: the small screen on the device itself and the Ledger Live app on a computer or mobile device. Most users’ actions take place in the app, although pushing one or both small buttons on the device itself is required to confirm some actions, like sending transactions.
The buttons are also used to navigate between the different cryptocurrency wallets. Each wallet is referred to as its own app within Ledger Live. For each crypto they want to manage, users have to install the appropriate app first.
Types of Ledger Wallets
Ledger makes two different wallet types:
1. Ledger Nano S
2. Ledger Nano X
Ledger Nano S
The Nano S has become known as one of the most popular and best-selling crypto hardware wallets to date. That said, it only has enough memory for about three apps at a time. That means users who want to work with more than three cryptocurrencies will have to repeatedly uninstall and reinstall new apps.
For example, say someone holds Bitcoin, Litecoin, and ETHereum. If they also want to use Dogecoin, they will have to uninstall the Litecoin app and install the Dogecoin app. Any Litecoin balance will still be held on the wallet, but to access it and send transactions, the Litecoin app will need to be reinstalled, which would require uninstalling an existing app.
Apps for different cryptocurrencies take different amounts of memory, so the potential number of installed apps may be higher than three. While limited currencies can be managed at one time, the list of Ledger-supported crypto is 1,800 coins long.
Ledger Nano X
The Nano X is the newer, upgraded version of the Nano S. Both wallets work with the Ledger Live app, and function in generally the same manner. However, the Nano X has a few extra features and allows for the storage of many more crypto apps at once.
While the Nano S supports only 3-7 apps at a time, the Nano X supports up to 100. Ledger Nano X users can connect to the app via mobile devices as well, thanks to the Nano X’s Bluetooth compatibility.
The Nano X can also run off of battery power and connect to a mobile device via Bluetooth. All of these extra features and upgraded functionality help explain why someone might choose the more expensive Ledger Nano X over the Nano S.
Why Get a Ledger Wallet?
The biggest reason to consider getting a Ledger wallet is for the additional security. Holding crypto in a hardware wallet results in greater security for two main reasons:
1. Coins can be held offline in cold storage.
2. Private keys are held by the individual.
Holding coins in cold storage means the private keys aren’t connected to the internet, so there’s no way for hackers to access them. While a hardware wallet generally has to be connected to an internet-connected device to send transactions, when not doing so the wallet will be completely offline.
Holding the private keys yourself means there’s no need to trust a third-party like an exchange. If an exchange gets hacked, and there’s no insurance policy, then users could be left empty-handed. This might be why those who hold large sums of crypto choose to make the investment in a hardware wallet like those made by Ledger.
Let’s take a closer look at how hardware wallets, and wallets made by Ledger specifically, come with increased security for long-term storage of cryptocurrency.
Ledger Hardware Wallet Security
Ledger wallets come with the following security features:
1. 24-word backup recovery seed phrase
2. PIN
3. Certified Secure Element (CC EAL 5+) hardware
When setting up a new wallet, users have to create a PIN that will be used to access the wallet. A seed phrase is also provided.
This 24-word string can be used to restore the balances held on a wallet. It’s best to keep that phrase somewhere safe and never store it digitally. Anyone with access to the seed phrase can steal the private keys, and therefore the coins, from your wallet. The seed phrase and PIN come standard with most hardware wallets.
Ledger uses somETHing called Secure Element chips. Chips like these are also used to protect credit cards, SIM cards and passports. Ledger wallets are certified as being secure by an independent third-party.
There are different degrees of Evaluation Assurance Level (EAL), and Ledger has achieved the level EAL 5+. There are only two levels higher than EAL 5. According to Ledger, they are the only company that makes hardware wallets that have earned this level of security certification.
Closing Thoughts
Now that you know how does Ledger work, the company’s hardware wallets can be used to hold crypto in a more secure manner. Cold storage is considered to be the ultimate in blockchain security measures for that matter.
But while hardware wallets like those made by Ledger come with increased security for crypto, they also require greater user responsibility. Using a hardware wallet means you hold the private keys to your crypto, rather than them being held on an exchange. If you make a mistake like losing your PIN and backup seed phrase, the crypto held on that wallet will be gone forever. There’s nothing that Ledger or anyone else will be able to do to help.
