Why would the cryptocurrency investor want to keep their assets in a hardware wallet versus using a wallet provided by an exchange or other online services? The reason for this is because cryptocurrencies are completely different from any other type of currency.
With traditional currencies, YOU are always the most important person. If you have ever lost the password to your bank account, or the PIN number for your ATM card, you know that help is readily available. All you have to do is produce an ID and the financial institution will help you recover your passwords or your PIN, and soon you will once again have full access to your money.
This is not the case for your cryptocurrency. Crypto doesn’t care at all about who YOU are as the system is all set up using private keys that need to be kept secured for your money to be safe. These keys are used to verify your account and transaction history, and while mathematical calculations can be used to determine IF your key has been used, they can’t be used to determine WHO used it.
Anyone who has access to your private key can send funds, and that is the reason that you want to keep your key absolutely safe from anyone else getting their hands on it as there is also no way to recover your funds (…at least not yet) once they have been lost. If a hacker gets access to your key, they can steal your money. Depending on who you are this might be a lot or a little, but either way, it isn’t something that you don’t want happening to you.
That is why you want to have a hardware cryptocurrency wallet. Why is this more secure you ask? That is because your private key always stays on the device, and is not sitting in some data bank that could possibly be accessed by nefarious entities looking to steal your investments. Does this mean it is completely foolproof? No, but it is the very best chance that your key won’t be taken and used to drain your accounts.
Ledger Nano S
One of the best hardware wallets available is the Ledger Nano S, and for the purposes of this article we will take you through the steps needed to set up your wallet on this device, and begin using this wallet, instead of online wallets, to store your cryptocurrency.
When you buy the Ledger Nano S, it will come in a box with the product and a cable inside. The cable connects to your computer (MAC, Windows, and eventually your Android or IOS devices). In the box, you will also find a sheet of paper that will become very important, because on that sheet of paper will be your recovery phrase, which is the most important thing when it comes to setting up your new hardware wallet.
The sheet will have 20 blank slots on it, and you must fill this with 20 unique words. This is your backup, and it will allow you to recover the information contained in your wallet if you should ever lose the device itself. Obviously, this piece of paper with your 20 unique words on it needs to be stored someplace very safe (like a bank lockbox), because if a thief gets their hands on this, they can access your wallet and steal your money.
One also needs to make sure that this piece of paper never gets photographed (by you or anyone else if you’re smart), and never write the 20 words down where someone else can see them.
When you get the device out of the box and have the cable plugged into your computer, then go ahead and plug the cable into the back of the device. You will see a tiny welcome screen on the device light up, and you will be able to navigate the device using the buttons on the top. Press both buttons at the same time to begin setting up your wallet. You will have two choices here. The first one is to configure a new device, and the second is to restore a device, which is where those 20 passwords come into play.
When you choose the new device option it will ask you to enter a PIN. Once you have this accomplished, you will begin to enter the 20-word recovery phrase. Write the words down on that piece of paper (with a pen, and in the correct order) that came with the device, and once entered promptly take that piece of paper and put it somewhere very, very safe.
The device will then ask you to confirm your recovery phrase by asking you what word is connected to what number, and you must type in the right word in order to complete this step.
Now that the device is set up, it is ready to use. For the purpose of this article, we will be using a Windows computer. Don’t worry, if you have a MAC the steps are similar enough that you will get it because you will be using a browser to make it all happen.
The site that comes up (www.ledgerwallet.com) will have five choices at the top, and you will want to click on the apps button. Once you click this, you will be brought to some more choices, and you will want to pick the Ledger Wallet app first. This app is for Bitcoin, and you should download the Chrome extension if you are using Chrome (recommended). The Chrome extension works the same on both MAC and Windows computers.
When you connect your Ledger Nano S to the Bitcoin wallet on the app you will be required to select which blockchain you want to use. For this article we will select Bitcoin, and once you do this, it will connect your wallet and synchronize your device. Once in you can see how many Bitcoins you own, and you easily navigate the device using your computer. Once finished make sure to disconnect your device from your computer (never leave it plugged in unattended), and store it in a very safe place.
This is a very easy way to safeguard your assets. One that gives you the highest amount of security possible for your cryptocurrency. As long as you follow all of the steps and take the time to ensure the safety of your information and device, the probability that you will ever have any of your cryptocurrency stolen is virtually nil. This is why you will want to buy a hardware wallet, and now you know how to use one.
Afterthroughts
If you have not heard, I have launched a cryptocurrency research center that seeks to locate the top cryptocurrencies in the space with the fortitude to change the future. We want to be the top cryptocurrency investors in the room. If you do too head over to CryptoInvestingInsider.com and learn how to trade cryptocurrency for maximum success.
Congratulations @chrishiss! You have completed the following achievement on Steemit and have been rewarded with new badge(s) :
Click on the badge to view your Board of Honor.
If you no longer want to receive notifications, reply to this comment with the word
STOPTo support your work, I also upvoted your post!
Downvoting a post can decrease pending rewards and make it less visible. Common reasons:
Submit