Cryptocurrency All-in-One For Dummies. Peter Kent

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      Hardware wallet

A hardware wallet can arguably be one of the safest types of crypto wallets out there. These wallets store your private keys on a device like a USB drive. You’re still able to make online transactions, but the wallets are offline most of the time, so you can consider them cold wallets. Check out Table 3-4 for a short list of popular hardware e-wallets.

      

For security purposes, a hardware wallet is an absolute must (and a bare minimum) for large crypto amounts. Keeping a ton of your assets on other, less secure types of wallets increases your risk of unrecoverable hacking attacks. Even safer than hardware wallets are paper wallets (see the next section).

TABLE 3-4 Popular Hardware Wallets

Name	Description	Pros	Cons
Ledger Nano S, www.ledger.com/products/ledger-nano-s	Most popular hardware wallet. Secure physical device that supports multiple cryptocurrencies and uses two-factor authentication.	Small. Hardware designed for security. Supports over 700 types of coins and tokens.	Cost ($59). Requires client software to control crypto-assets.
Trezor, https://trezor.io/	Secure physical device that supports multiple cryptocurrencies and uses two-factor authentication.	Established reputation. Physical buttons or touchscreen. Supports nearly 700 types of coins and tokens.	Cost ($59 for Model One). Requires a web wallet to control some stored crypto-assets.
KeepKey, www.keepkey.com	Similar to the Ledger Nano S and Trezor features, but with a slightly larger screen.	Firmware is open source. Designed to meet current blockchain requirements.	Cost ($49). Relative newcomer. Limited number of supported coins and token types.

Here are some advantages of hardware wallets:

       They’re one of the safest crypto wallet options.

       They’re great for storing large amounts of cryptocurrencies that you don’t want to use on a day-to-day basis.

      Some disadvantages of hardware wallets include the following:

       They’re the most expensive type of wallet.

       They aren’t as user-friendly as other wallets, especially for beginners.

      Paper wallet

A paper wallet is a super-cold crypto wallet; see Table 3-5 for examples. To use it, you print out your private and public keys. You can send funds by transferring the money to the wallet’s public address, and you can withdraw or send your currencies by entering your private keys or by scanning the QR code on the paper wallet.

      Some of the advantages of paper wallets include the following:

       They’re ultra hacker-proof.

       You don’t store them on a computer, mobile phone, or third-party server.

TABLE 3-5 Popular Paper Wallets

Name	Description	Pros	Cons
ETHAddress, https://github.com/ryepdx/ethaddress.org	Open-source project with source code you can compile and run on your own computer to generate private and public keys.	Open-source code. Useful for creating multiple accounts and keys.	No easy-to-use interface. Must download and run code or use Chrome add-in.
MyEtherWallet, www.myetherwallet.com	Provides the option to print your keys instead of storing them. The easiest way to create your own paper wallet.	Easy-to-use web interface for creating accounts and keys.	You must protect generated keys.

Paper wallets do have some disadvantages, though:

       They aren’t user-friendly for non-geeks.

       They’re harder to use for day-to-day transactions than other wallet types are.

       They can catch fire.

      

Some paper wallet generators include WalletGenerator (https://WalletGenerator.net), Bitcoinpaperwallet (Bitcoinpaperwallet.org), and Mycelium (https://mycelium.com/mycelium-entropy.html). Book 2, Chapter 4 has steps for setting up a paper wallet through http://www.bitaddress.org/. Mycelium offers an original and even more secure way to generate paper wallets, with a USB device that you plug directly into your printer. The device generates a paper wallet that automatically gets printed out without ever having touched your computer.

Choosing a Crypto Wallet

      Depending on your cryptocurrency needs and goals, you may need more than one type of cryptocurrency wallet. For example, Kiana uses cold wallets to store larger crypto reserves and hot wallets for active trading. Regardless, you can choose your cryptocurrency wallet (or wallets) based on different characteristics, some of which are discussed in the following sections.

      

Make sure you’ve gathered everything you need to know about a given wallet before committing to getting one.

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