This third entry in our series reviewing the leading hardware bitcoin wallets on the market scrutinizes their privacy and security.

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What’s the Best Hardware Wallet on the Market? Part 3 - Bitcoin Magazine

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Bitcoin Magazine provides news, analysis, information, commentary and price data about Bitcoin.

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What’s the Best Hardware Wallet on the Market? Part 3

What&rsquo;s the Best Hardware Wallet on the Market? Part 3

What&rsquo;s the Best Hardware Wallet on the Market? Part 3 page sep sitename

This is the third article in a three-part series that examines five of the most popular Bitcoin hardware wallets. Read the first part, focused on the wallets&rsquo; physical safety and outward appearance here. Read the second part, focused on simplicity, accessibility and privacy, here. By request, samples were provided by some of the companies for review purposes. After assessing the physical sturdiness, appearance, simplicity, accessibility and privacy of five of the leading hardware bitcoin wallets on the market, it&rsquo;s time to analyze arguably the most important feature of all: security.&nbsp; There are plenty of convenient features and integrations to be found in hardware wallets, but none of them are as valuable and important as the efficiency with which they secure your bitcoin. The main expectation of the device is not to enable Bluetooth connectivity or seamlessly integrate with a trading platform, but to serve its base function of keeping coins safe and away from hackers&rsquo; malevolence. Just like a mobile phone should be able to make calls before running 3D video games, a hardware wallet is supposed to offer robust cryptographic security.&nbsp; Thankfully, the devices scrutinized in this three-part analysis are the five best options available on the market, so any security compromises in favor of extra features are minimal. Furthermore, the hardware wallets covered in this review were not arbitrarily chosen &mdash; they each benefit from the positive recommendations of bitcoin.org. In no particular order, these devices are Trezor Model T, Ledger Nano X, ShapeShift&rsquo;s KeepKey, Shift Cryptosecurity&rsquo;s bitcoin-only BitBox02 and Coinkite&rsquo;s Coldcard Mk3. How to Assess Hardware Wallet Security In the context of hardware wallets, there are multiple types of &ldquo;security&rdquo; and many complex issues that have to be taken into consideration.&nbsp; First of all, the private keys these wallets protect should not get leaked during remote or physical attacks. They must act as a proxy which manages your keys without being exposed to the risk of malware, spyware, keyloggers, viruses or other malicious pieces of software that can infect your computer.&nbsp; Secondly, both addresses and amounts of cryptocurrency being sent during transactions must be verifiable. Each hardware wallet is endowed with a universal microcontroller which communicates with its encrypted aspects and facilitates user input &mdash; and this is the most vulnerable and tricky component of these devices. Thankfully, the new generation of hardware wallets has solved any issues with this user input by integrating easily readable screens which display all of the information required to compare with the computer or mobile phone input before validating the transaction. (But, as a general piece of advice, always check everything to be sure that your device is functioning properly and doesn&rsquo;t result in you losing your bitcoin.)&nbsp; Thirdly, it&rsquo;s important to take into account the integration of secure chips (as in the case of the Ledger Nano X, BitBox02 and Coldcard) and the ease with which users can create a multisig security model (the Trezor Model T and Coldcard are the champions in that field). Fourthly, it&rsquo;s essential to reduce the attack surface by creating a Bitcoin-only firmware. Some manufacturers take this feature very seriously, and the fact that you can&rsquo;t glitch the software due to the inclusion of altcoins can make a lot of difference in security. As scarce digital commodities, your bitcoin require uncompromising security.&nbsp; The use of open-source software and native SegWit (bech32) addresses are also criteria for security and privacy. The former enables easier audits by security experts and quicker fixes, while the latter reduces transaction fees and grants access to CoinJoins via Wasabi Wallet.&nbsp; Furthermore, it&rsquo;s important to check if the hardware wallet manufacturer enables bounty programs for bug disclosures. The existence of a clear, financial incentive for the discovery of various security issues attracts ethical hackers who may bring significant contributions and ultimately add to security. Last but not least, a price comparison will be presented. Sometimes the &ldquo;you get what you pay for&rdquo; principle applies and, in this context, it&rsquo;s important to introduce cost as an extra metric for security. So, here are the sections you can expect to find in this final entry in this series: History of hacks. The presence of secure chips. The difficulty of setting up multisig. The option of a bitcoin-only device. The use of open-source software. Support for bech32. Use of bug bounty programs. Price. 1. History of Hacks Historically speaking, every hardware wallet manufacturer has encountered issues with hackers and exploits. No design is perfect and absolute security from hacks is virtually impossible. The golden rule when it comes to hardware wallets is to treat them the same way you would treat paper wallets: Make sure that nobody gets physical access. For more information on physical security, please refer to the first article in this series. This section is based on the findings of Wallet.fail, white hat hackers Dmitry Nedospasov, Josh Datko and Thomas Roth, as well as independent researchers Saleem Rashid, Sergei Volokitin, LazyNinja, TheCharlatan, Kaspar Etter and Reddit user De_Wilde_Weldoener. Furthermore, it should be noted that all of the issues presented have been fixed by the hardware wallet manufacturers and that the findings serve as a reminder that no device is perfect and should always be physically protected. Trezor During its 35C3 presentation in December 2018, the team members of the Wallet.fail project presented multiple issues with the Ledger and Trezor hardware wallets. Most notably, Roth was able to extract the seed phrases and PIN from a Trezor One, while his collaborator Nedospasov introduced a prototype for the &ldquo;Trezor Glitcher&rdquo; &mdash; a device which instantly exploits the vulnerabilities of Trezor hardware wallets. The issue they exploited was that private keys were being moved in the RAM during software upgrades, and a fix was released 62 days later with version 1.8.0 of the firmware. Trezor&rsquo;s devices were also found to be vulnerable in August 2017, as explained by security enthusiast Doshay Zero404Cool in an extensive blog post. Basically, the author identified vulnerability issues with the ST32F05 chip (which is used in the Trezor Model T and the KeepKey). Saleem Rashid has also written an article which explains all of the technical intricacies involved, and Trezor fixed the issue eight days later with firmware update 1.5.2. These are only two of the most notable examples of security issues with Trezor hardware wallets, which have been identified and fixed over the last couple of years. However, it&rsquo;s this openness and willingness to constantly solve security issues that makes Trezor a trusted, device manufacturer. The large community and the numerous security experts who constantly scrutinize the hardware and software developed by Trezor are one of its most important security guarantees and the reason why Trezor is still the industry standard for hardware wallets. Ledger From a design perspective, Ledger&rsquo;s hardware wallets are the exact opposite of Trezor&rsquo;s: They rely on a secure element chip which acts as a closed-source blackbox and aren&rsquo;t as open about security. Its bounty program webpage doesn&rsquo;t contain a list of fixed issues but only mentions bug submission criteria and procedures, as well as the company&rsquo;s &ldquo;Wall of Fame.&rdquo; Before the new Nano X model was launched in the second quarter of 2019, Ledger&rsquo;s Nano S has been subjected to two significant and well-documented exploits. Firstly, Rashid reported a security issue in November 2017, which Ledger patched four months later. More specifically, the architecture of the microcontroller unit (which communicates with the buttons, screen and USB port) could be tweaked to run a custom firmware which tricks the secure element chip.&nbsp; In December 2018, the Wallet.fail team also managed to successfully launch a compromising attack on the Ledger Nano S, which allowed it to run the video game Snake on the device. It was a way for it to prove that the physical design is flawed and anybody can install malevolent software which bypasses the initial verification process and might be able to redirect the funds to another address. This demonstration was most likely a rebuttal to the famous statement made by Ledger co-founder BTChip, who tweeted support of the idea that Ledger devices are so secure that they can have their software reset and be sold to other users. In May 2019, the Wallet.fail team identified a lack of memory protections in the STM32WB55 chip from the Ledger Nano X, and it&rsquo;s still unclear if the issue was fixed by a firmware update. As a company, Ledger isn&rsquo;t as transparent as Trezor and oftentimes doubles down on issues as intentional design choices (both Rashid and the Wallet.fail team have encountered communication issues). Therefore, purchasing any Ledger device implies trusting the company&rsquo;s security model to a degree that isn&rsquo;t necessarily compatible with the cypherpunk spirit of open-source software. KeepKey From a hardware and firmware perspective, the KeepKey is very similar to the Trezor Model T. The only major differences can be found in the enclosure (which is more premium in the case of the KeepKey), the design and architecture, and the software of choice (which ShapeShift has modified to fit its business philosophy). In April 2019, Sergei Volokitin managed to take advantage of a design flaw in order to glitch the KeepKey. As he explains in his OffensiveCon19 presentation, Volokitin was able to successfully run an injection attack which glitched the device in less than five minutes and made it susceptible to the installation of custom, malevolent software. The conclusion drawn referred to the board design and choice of chips, as the microcontroller is not made to resist such attacks. Also, the large number of...

What’s the Best Hardware Wallet on the Market? Part 3 page sep sitename

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This hardware bitcoin wallet review tests the simplicity, software, verification, unique features and privacy of the Trezor Model T, Ledger Nano X, KeepKey, BitBox02 and Coldcard Mk3.

Bitcoin Wallet Reviews: What’s the Best Hardware Wallet on the Market? Part 2 - Bitcoin Magazine

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Bitcoin Wallet Reviews: What’s the Best Hardware Wallet on the Market? Part 2

Bitcoin Wallet Reviews: What&rsquo;s the Best Hardware Wallet on the Market? Part 2

This hardware bitcoin wallet review tests software, unique features and privacy of the Trezor Model T, Ledger Nano X, KeepKey, BitBox02 and Coldcard Mk3.

Best Hardware Wallet on the Market Review Part 2 page sep sitename

This is the second article in a three-part series that examines five of the most popular Bitcoin hardware wallets. Read the first part here. By request, samples were provided by some of the companies for review purposes. There are multiple reasons why the user interface recommended, developed or provided by hardware wallet manufacturers is important.&nbsp; First of all, depending on the nature of this visual interaction, users get various degrees of privacy and security. For example, websites and browser plug-ins are convenient but very risky and vulnerable to malware and phishing attacks; proprietary software installed on the hard drive is excellent but may leak some data to the company server; and integrations with your full node via Bitcoin Core, the Electrum Personal Server or Wasabi are ideal because they enable complete sovereignty and maximum privacy.&nbsp; For the purpose of promoting a particularly safe way of storing and sending bitcoin, this review will intentionally exclude internet browser plug-ins and webpages (unless they are the only official way to access the wallet). These features are nice to have, but they are susceptible to third-party attacks and, therefore, may pose a threat to users&rsquo; security and data privacy. Instead, the focus will be on software clients that operate on the users&rsquo; computers, with a focus on minimizing interactions with the company&rsquo;s servers and maximizing sovereignty with full nodes. Secondly, since visual interfaces determine the overall user friendliness and ease of use for hardware wallets, they also represent an important factor for mass adoption and retail success. To nontechnical users, the official UI/UX is the only way through which they will ever experience their hardware wallet. Therefore, it&rsquo;s important to take into account the software&rsquo;s simplicity of use and whether or not it&rsquo;s available on multiple platforms. Thirdly, visual interfaces may also include extra features and integrations that simplify other activities such as buying bitcoin and exchanging it for fiat or altcoins. While accessing these services is not recommended for HODLers who are concerned about their privacy, some of these options may come in handy for traders and everyday users.&nbsp; Just as in the previous part of this analysis, the five hardware wallets under scrutiny for this review are Trezor&rsquo;s Model T, Ledger&rsquo;s Nano X, ShapeShift&rsquo;s KeepKey, Shift Cryptosecurity&rsquo;s BitBox02 and Coinkite&rsquo;s Coldcard Wallet Mk3. Given the criteria described above, the rest of the article will be split into five sections:&nbsp; Simplicity of use. Multi-platform software. Extra verification steps&nbsp;Unique features. Privacy. Hopefully, the results of this review will help determine the best hardware wallet choice for each user type. 1. Simplicity of Use Writing down the seed phrase, verifying some designated words on the hardware wallet&rsquo;s screen (or all of them, depending on the product&rsquo;s design) and setting up some kind of backup are all part of the exciting (yet slightly frightening) phase of getting immersed in financial sovereignty. The thought that, unlike in traditional finance, you cannot recover funds that you lose by mistake can sometimes be overwhelming. In this regard, simplicity really matters and good interfaces can make a lot of difference in the process of attaining financial sovereignty. As you are about to discover, the test includes four newbie-friendly devices and one power-user product that benefits from massive community support &mdash; but still requires a good understanding of operation security fundamentals and Bitcoin essentials for use. Simplicity of Use: Trezor Model T The web-based Trezor Wallet is the industry standard for hardware wallet user interfaces. The Trezor Model T uses the Trezor Bridge client software to facilitate communication between the hardware wallet and a computer. This application is a hybrid in that it requires installation but still runs in your browser.&nbsp; The installation is straightforward and easy; it teaches new users how to validate each operation on the device and introduces the concept of a recovery seed in a comprehensive way. The software also encourages the creation of backups and makes use of a familiar account and password system. After the initial setup is complete, everything is straightforward and clean: Users can send or receive bitcoin but also receive suggestions for nearby ATMs and exchanges where they can buy bitcoin.&nbsp; Trezor is the world&rsquo;s first hardware wallet manufacturer and all units reviewed in this test are more or less inspired by its designs and specifications. Thanks to its first-mover advantage and long-time popularity, every Trezor product has a lot of community support. In this regard, users will find that they can connect their Model Ts to the Electrum Web Server, Wasabi Wallet, Exodus and even ShapeShift.&nbsp; Some of these alternative options will grant more privacy and sovereignty, while others bring convenience through extra features. Overall, the experience is the industry standard for onboarding users to financial sovereignty and is worthy of a 10 out of 10 rating. Simplicity of Use: Ledger Nano X Ledger Live is a clean, simple and feature-packed local client which adds functionality to the Nano X. Conversely, the Ledger Nano X makes use of a local application called Ledger Live. What sets it apart from Trezor Bridge is the fact that the software installation takes place locally on your hard drive, so you can check your balance even when you&rsquo;re not connected to the internet (assuming that the data had been updated) and benefit from slightly improved privacy. Also, the app serves the purpose of checking the authenticity of the hardware wallet by interacting with the internal secure element. It still doesn&rsquo;t replace a full node or Wasabi synchronization, but it&rsquo;s a superior experience as compared to a webpage.&nbsp; Ledger Live is very intuitive and the installation process is basically a tutorial which teaches users about the device&rsquo;s basic functionality. After it&rsquo;s generated, the seed phrase needs to be validated word-by-word on the device for extra safety. At the end of the setup, each cryptocurrency application needs to be installed individually &mdash; so users can choose not to increase the attack surface with extra features by making the Nano X a BTC-only device.&nbsp; The interface also features a &ldquo;Buy Crypto&rdquo; menu which allows users to quickly buy bitcoin locally or exchange them for other cryptocurrencies via ShapeShift or Changelly.&nbsp; Correspondingly, the experience deserves a perfect-10 rating. Simplicity of Use: KeepKey The ShapeShift interface is clean, feature-packed and compatible with the KeepKey and the Trezor hardware wallets (Ledger will also be added). As a product of the parent company, KeepKey is seamlessly integrated with the ShapeShift Platform. New users are greeted by a familiar, simple and feature-packed interface which includes options to buy, send, receive and trade your bitcoin. Interestingly, this platform is designed to also support Trezor hardware wallets and plans to integrate functionality for Ledger products. In this regard, it seems like ShapeShift is trying to provide a software alternative to the dedicated user interfaces developed and provided by competing manufacturers. KeepKey also has Client, a barebones desktop application which allows users to check, send and receive BTC, and to connect to the ShapeShift website. It&rsquo;s basic and limited in functionality but may provide a more privacy-friendly experience for those who don&rsquo;t want to sign up to the ShapeShift platform. Speaking of alternative software, it should also be mentioned that, unlike the Ledger Nano X, the Trezor Model T and the Coldcard (all versions), there is no KeepKey compatibility with Wasabi Wallet. Luckily, ShapeShift&rsquo;s device works just fine with the Electrum Personal Server and can connect to full nodes running Bitcoin Core 0.18 or newer.&nbsp; KeepKey is excellent in its simplicity of use and deserves praise for also integrating rival manufacturers on the platform. However, it should be noted that the lack of compatibility with Wasabi Wallet is possibly the biggest current downside. Simplicity of Use: BitBox02 Under the &ldquo;Expert Settings&rdquo; menu, the BitBoxApp has two unique features: coin control and full node connectivity. Last but certainly not least, the BitBox02 offers a competitive alternative with the BitBoxApp. The installation experience is very similar to the one created by Ledger. However, there are two options which set the BitBox02 apart: It enables coin control (as opposed to merging UTXOs together, users get to choose from which amount they&rsquo;re sending, so that financial privacy gets protected), and it allows a seamless pairing with a local full node.&nbsp; Both of these features empower users with privacy and sovereignty in a comprehensive and straightforward interface. Basically, Shift Cryptosecurity&rsquo;s product is the middle ground between the Trezor and the Coldcard: It offers some power-user features while also keeping it basic. Also, the in-app guide, positioned on the right sidebar of the BitBoxApp, makes it simple to run the setup, even for newbies. Overall, the BitBox02 has a great, basic interface which somehow manages to integrate some advanced features that users who appreciate financial sovereignty will find useful. It doesn&rsquo;t include all of the trading features found in the KeepKey, nor does it have in-app access to a series of third-party exchange services as the Ledger and Trezor do, but it gets privacy and sovereignty right without overcomplicating matters.&nbsp; The BitBox02&rsquo;s intuitive onboarding also receives a perfect-10 rating for making power-user features simple.&nbsp;&nbsp; Simplicity of Use: Coldcard Wallet Mk3 For maximum privacy and financial sovereignty, Coldcard is designed to work with Wasabi Wallet and the Electrum Personal Server. Contrary to market trends, the Coldcard hardware wallet doesn&rsquo;t have a dedicated software client which...

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Bitcoin Wallet Reviews: What’s the Best Hardware Wallet on the Market? Part 3

Bitcoin Wallet Reviews: What’s the Best Hardware Wallet on the Market? Part 2