Web3 wallets have a paradoxical sense of security. Never show your keys and your funds are yours forever. On the flip side, lose your keys and say goodbye to your assets. There is also no middle man whom you can nudge and convince to “do something”.
Majority of the DeFi community use software wallets like Metamask. These are also called hot or software wallets. The risk in using these types of wallets is that they are prone to hacks or phishing attempts, primarily because they operate online. With this need of self custody, offline wallets, more commonly known as hardware wallets come to the rescue.
This article allows you to delve deeper into the technology of hardware wallets, and how Ledger was able to lead the pack by providing you the smartest way to secure your crypto.
Ledger is a France-based company founded in 2014 that offers devices in the blockchain technology. Ledger pioneers and continues to be the primary manufacturer of hardware wallets that are certified by the French National Cybersecurity Agency (ANSSI).
It boasts in providing a “Secure Element,” which is a special chip that is used in concealing private data while making it accessible at the same time, like those in passports and payment systems. Although most hardware wallets have a chip, Ledger stands out by embedding a tamper-proof design with intrinsic countermeasures against hacks and attacks.
Unlike any other hardware wallet thus far, Ledger has also built its own operating system called BOLOS. This increases the isolation between crypto applications, mitigating risks against external malicious attacks. Besides providing a more secure platform for applications development, BOLOS also allows third party developers to create applications in Ledger devices. This technology enabled Ledger to have its own staking platform and exchange in its application called Ledger Live.
Sourced from Our Custom Operating System - BOLOS | Ledger
Ledger wallets offer an extra layer of security to your private keys - not directly to your crypto, but to your keys. Cryptocurrencies may only be transferred from Ledger to another wallet when your Ledger is connected to the device, with a strong pin code required to function. Even if someone gets hold of your seed phrase, they won’t be able to enter into transactions without your Ledger wallet. Physical confirmation to confirm private key ownership and device passwords from the Ledger are mandatory for the execution of smart contracts and transactions in the blockchains.
Don’t worry, it’s not the end of the world. The crucial thing here though, is that you must not depend your entire security system on Ledger. Ledger must not be the only thing that knows your private keys. Your actions and some other truster physical paper must also be knowledgeable of your seed phrase. Without the 24 words seed phrase, you may never retrieve your crypto.
Once you lose your Ledger, you can get a new hardware wallet. Set it up with your old recovery seed phrase and you can easily access your crypto again. Fortunately, Ledger offers a way to prevent this panic attack. If you have a second Ledger, you may just select “restore device,” to set-up your back-up Ledger. You may store this safely and forget about it until a disaster strikes.
Web3 grows rapidly, but hackers are also getting smarter and adopting fast with the innovations in crypto. It is integral that intentional self-education attitude is kept and observed by the investors. Being up-to-date with the latest technology provided by companies like Ledger could take your security game up a notch.