Cryptocurrencies are increasingly becoming a part of investors’ portfolios. With that in mind, the reliance on somewhere to store them increases as well. To store your cryptocurrencies, you essentially have two options.
You could use software wallets, also known as hot wallets, where your crypto is stored online — for example, through an exchange. You could also use hardware wallets.
Hardware (physical) wallets are also known as cold wallets. Two of the most prominent cold wallets are Ledger and Trezor.
In this article, we will explore everything you need to know about the similarities and differences between these two cold wallets so that you know which one suits you better.
What Is a Crypto Wallet?
Every transaction conducted on a blockchain needs to be verified. Each person has his/her own cryptocurrency address (public keys) and private keys. Transactions are verified using public keys, and signed off on using private keys.
So, a private key is vital in cryptocurrency transactions.
However, if someone has access to your private keys, then that person can also access your funds. As such, crypto wallets exist. These wallets securely store your private key.
Crypto wallets can be software programs or platforms on the internet. In order to have access to your crypto wallet, you need to have access to a smart device, such as a computer, as well as the internet.
However, smart devices and everything else on the internet can be vulnerable to online hackers and malware programs. When your computer or internet is vulnerable, your crypto wallet is also vulnerable. That’s why an offline option — a cold wallet — is safer.
Why Own a Cold Wallet?
So why exactly use cold wallets instead of hot wallets?
As suggested, cold wallets offer you a way of storing private keys without risking that your data is stolen or manipulated.
You may wonder, Why not just use a hot wallet and simply secure your device? You can do that, but computer malware can be disguised as a legitimate software program and trick you into authorizing access to your computer. It may even get past your antivirus.
Additionally, no one can access a cold wallet without your permission. A cold wallet operates offline, giving a greater deal of security to your private keys. Thus, using a cold wallet is safer because it prevents hackers from accessing your private keys and stealing your cryptocurrencies.
Cold wallets are physical hardware (like USB flash drives). They usually have a hard plastic case surrounding a small screen that distributes the information. In order to access your private keys, you are required to set up a PIN. When you set up for the first time, the PIN is a list of around (generally) 12 to 24 words. This set of words is known as the seed phrase or seed recovery phrase.
You should write down the seed phrase and keep it somewhere safe, because if you lose your cold wallet or it becomes corrupted, you will need this seed phrase to re-access your crypto. You can then complete transactions with ease and just confirm them through your hardware.
Most cold crypto wallets have similar functions, but they might slightly differ in how they work. Of course, these cold wallets support Bitcoin and other altcoins such as Ether, but most of the major cold wallets will support a wide range of other coins, too.
Two of the most prominent cold wallets are Ledger and Trezor. In this article, we’ll compare Ledger and Trezor, and compare some of their pros and cons, main security features, supported coins, price and other features.
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.
Launched in 2013, Trezor is based in the Czech Republic. As with Ledger, the purpose of this cold wallet is to keep private keys offline and secure from potential hackers on the internet.
As the first cold wallet ever released, Trezor has paved the way for the formation of other cold wallets.
Trezor has established itself as one of the most eminent and safe cold wallets. The two main models that can be purchased are Trezor Model T and Trezor One.
Trezor Model T is the updated model of Trezor One. While Trezor One remains the most popular purchase among the two, Trezor Model T has more features that increase the efficiency of this cold wallet. The biggest new feature that Trezor Model T has is its touch screen.
Ledger vs. Trezor
Both the Ledger and the Trezor have made it much easier to securely store private keys. However, while the two are very similar, they also have their differences. We will briefly compare and contrast their features so you know which one suits you.
According to Exodus, Trezor supports 1,180 cryptocurrencies, and Ledger supports around 1,250.
The major difference is that Trezor does not give full support to some cryptocurrencies. To illustrate, Trezor does not fully support Ethereum and its ERC-20 tokens. To store Ethereum through Trezor, you would have to use third-party sites, such as MyEtherWallet. Ledger, on the other hand, offers full support for Ethereum, and you do not need to use any third parties.
When it comes to the older models, Trezor One vs. Ledger Nano S, the latter is also superior because it supports more altcoins. In addition, Trezor One does not support some big altcoins, such as Ripple (XRP), Monero, ADA, and Tezos. Only the Trezor Model T supports them, but the Model T is also more expensive.
Hence, when it comes to supported coins, Ledger is better.
There has not been any reported case where Trezor or Ledger has failed to protect people’s data. Both of them require a password and the seed phrase to let you access your crypto wallet. The only way you can be vulnerable is if you write your seed phrase on a computer or other smart device that gets hacked. So both the Ledger and Trezor are safe to use.
There is, however, a minor disadvantage to Ledger. You cannot actually see what code goes into the ledger, as it is not open source.
Unlike Ledger, Trezor is open source, which allows people to see the source codes and redistribute or modify them. This means bugs can be identified more easily, but there is a slightly enhanced security risk.
Ease of Use
Both Ledger and Trezor are very simple to use. The older models, Trezor One and Ledger Nano S, have a two-button system. Once you learn how to control it, it is very easy to access your crypto wallet.
In addition to Ledger Nano S, Ledger Nano X also has a two-button system.
Trezor Model T, on the other hand, is free of buttons and has a touch screen. It is much easier to use when compared to the two-button version.
So, the Trezor Model T has the upper hand when it comes to ease of use.
Price plays a key role when you want to decide which brand to buy.
Ledger Nano S costs around $59, while Trezor One costs around $55. The difference between the two is minor.
The upgraded models are certainly more expensive. While Ledger Nano X costs about $120, Trezor Model T costs around $170. The difference in price between the pair is greater than with the older models. However, Trezor Model T does not have any major advantages over Ledger Nano X to justify this difference.
Moreover, Ledger Nano X offers Bluetooth communication, and Trezor does not. So the approximately $50 difference in price is not reasonable.
In terms of price, buying Ledger is better than buying Trezor.
When it comes to the size of the hardware, it depends on personal choice. Both the Ledger and Trezor are relatively small and easy to carry.
However, if you prefer a smaller, flash drive style hardware, then Ledger is the choice for you.
If you want something that is about the same size as car keys, then Trezor is the solution for you.
The sizes of the two are as follows:
- Trezor hardware dimensions: 59 mm x 30 mm x 6 mm
- Ledger hardware dimensions: 98 mm x 18 mm x 9 mm
Ledger Nano X has a stainless steel cover, which makes it very durable.
Both models of Trezor have a plastic cover, which makes them less durable than Ledger. You can purchase silicone cases to protect your Trezor hardware.
However, that still does not make Trezor as durable as Ledger.
So, Ledger takes the crown as the more durable hardware.
It is important to have a good display when it comes to reading crypto addresses, since everything should be carefully checked.
When it comes to the screen display, Trezor has a bigger screen than Ledger. Many users consider this a huge benefit because the information is more organized and easily comprehended.
Moreover, Trezor Model T comes with a colorful touch screen model that makes the display even better and much easier to use.
So when it comes to their displays, Trezor has the edge.
The Bottom Line
To conclude, both the Ledger and the Trezor are important and useful if you want to store cryptocurrencies. They have made storing cryptocurrencies much safer. Whether one is better than the other depends on your personal preferences.
If you want to have more supported cryptocurrencies, cheaper hardware, smaller size and more durability, then Ledger is the better choice for you.
If you want a better display, slightly more security, bigger size, and easier-to-use hardware, then Trezor is the better choice for you.
One thing is certain: Future models of both the Ledger and the Trezor are an exciting and promising aspect of the world of cryptocurrencies.
If you are interested in buying Ledger or Trezor, you should only do so through their official websites. If you do not buy from secure websites, you run the risk of purchasing fake and malicious hardware.
Ledger website: https://www.ledger.com/
Trezor website: https://trezor.io/
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