If you're planning on investing more than a few hundred dollars into cryptocurrencies, and you're planning to "HODL" the majority of your coins, then you should invest in a hardware wallet. If you're serious about keeping your bitcoin and altcoins safe, then this Ledger Nano S review should be incredibly insightful on what's available.
The information provided here is for informational purposes only and should not be seen as investing advice. Our opinions on this site are only that, if you are considering an investment into cryptocurrency or anything we speak about on this site, please advise a trusted financial professional first, before doing so.
Why You Might Need A Ledger Nano S
Every day we see people who got hacked, or used their keys on a phishing site, and a lot of them aren't even noobs. Complacency happens to the best of us.
With a Ledger, you're able to keep your crypto safe with a tamper-proof, hack-proof, piece of hardware, and at the same time keep a backup handy should you ever lose it.
While Trezor is also a good option, it's only good for holding Bitcoin, whereas Ledger is compatible with Ethereum-based ERC-20 tokens, and has also been ported to NEO successfully too.
If you plan to just trade your tokens regularly, then you may find a Ledger cumbersome to use. However, if you're aiming for more of a long-term hold strategy, keep reading.
Ledger Nano S Review - What Exactly It Is?
The Nano S is the latest offering from Ledger, and the main upgrade is the display screen. In short, it's like a very secure USB drive, where you can keep your private keys safe.
The best way to explain how it works, is to explain how all wallets work, and how transactions on the blockchain take place. Most of us don't understand this at first.
A lot of people talk about storing their coins on their Ledger, when in fact coins are only ever stored on the actual blockchain. Instead, your ability to access those coins is on the Ledger Nano S.
For example, in order to get your coins off an exchange, you need to create a public address.
This is something that looks like this in the case of Bitcoin: 19j4sNZrzHIDDENqVX9SS3hPZ*HIDDEN
Or like this in the case of Ethereum: 0x3BfC*HIDDEN*738d60cCC3615A24Ba*HIDDEN
When you send coins to your address, they're not actually moving anywhere physically, they're just being assigned to the person who owns that address (for example, you).
To access the coins on that address, such as to send them somewhere else, or to cash them out at an exchange, you need a private key, or a 12-24 word backup phrase, which is basically a long password or list of words.
By using your private key in a wallet, you can interact with your coins. The simplest way to think of it is by looking at how Myetherwallet (MEW), a browser-based wallet, lets you send tokens to people.
1) First, you visit the site and click on "send/receive" tokens.
2) Next, you use your private key to access the tokens on your public address.
3) Finally, you can send those tokens to somebody else, or to an exchange.
The danger here, is that you could accidentally enter your private key or backup phrase into a phishing site, and the owners of the phishing site will then be able to access your tokens.
With Ledger, you need to have physical access to it in order to approve any transactions or send tokens. Using MEW requires you to unlock your Ledger using your PIN, and then open your wallet. You also don't have to use your private keys.
In other words, your coins would be safe.
What's more, Ledger has physical buttons on it, which means if someone put malware on your computer, they still wouldn't be able to access your coins through keylogging software or anything else.
What If You Lose Your Ledger Nano S?
When you first set up your Ledger, you're prompted to write down a 24-word backup phrase, unique to your Ethereum address. This means that if you lost it, you could buy a new one and restore it with the recovery/backup phrase. In fact, you could access it on any wallet via the recovery phrase.
Just don't lose that phrase or let someone else know it.
So with that overview in place, let's take a look at the actual Ledger, and what you get with it.
Ledger Nano S Unboxed - What's Inside
There's nothing really unexpected in the box. You've got the Ledger itself, the USB cable, and a keychain to go with it.
Even the manual isn't particularly dense, since it's just a piece of card directing you to https://www.ledgerwallet.com/start to get set up. That's actually reassuring, because the Ledger is way easier to set up than expected.
One thing that WASN'T unexpected, was this card:
We bought from the official Ledger store (and so should you, here's the link). Because of this, we were expecting to see some tamper-proof tape or other signs that this box was definitely safe.
It turns out, Ledgers are inherently tamper-proof anyway, which means you don't need to worry about the mailman messing with your device.
How Easy Is It To Use A Ledger Nano S?
Configuring your ledger isn't that difficult actually, their website walks you through the steps easily, and you'll be set up so quickly that you'll find yourself wondering if you missed a step.
Using the Nano menu system is pretty easy too. There's a left button to scroll one direction, a right button to scroll another way, and then you just hit both buttons at the same time to 'confirm'. Think of it like the 'Enter' key.
The first step you'll have to perform is setting up your PIN, and then confirming it. Obviously you'll want to make sure you have a note of this somewhere, because no PIN = no access.
Next, you'll be told your 24 word backup phrase. This is the phrase you'll enter if you ever lose your Nano and want to access your wallet somewhere else.
The Nano screen will display each word one by one, and you can use the card that comes in the box to write them down.
It's super important that you a.) Don't lose this backup phrase and b.) Don't let anyone else find it.
If somebody has your 24-word phrase, they can unlock your wallet using any wallet software, so they won't need your Ledger to access, and steal your coins.
The beauty of a Ledger though, is that you'll never need to use your private key or backup phrase to send or receive tokens, unlike with a software or browser based wallet. This means you'll be very unlikely to get phished.
The final step once you've written down your recovery phrase, is to download some Apps. The two you'll most likely to use are the Bitcoin App, and the Ethereum App.
To do this, you can just go to https://www.ledgerwallet.com/start (if you're not already there) and choose to "Install" the app. At this point, you'll be prompted to download the app via the Chrome browser.
What's important to realize is that you won't be able to interact with this app unless your Ledger is connected to your computer and you've unlocked it with your PIN. This is great, it means those coins are impossible to access without the recovery phrase, or physical access to your Ledger and knowledge of your PIN.
When your wallet is open, you'll see your address, in this case a Bitcoin address.
You can now enter this address in your exchange, or wherever else you've been storing your Bitcoin, and send your coins over to their new location. Once there, your coins are safe.
Using the Ledger Manager for Other Coins
In order to store different coins (other than Bitcoin, Ethereum or Ripple) you'll need to install their app on the Ledger. For that, install the Chrome extension "Ledger Manager" and connect your Ledger.
Then simply select the crypto you want to store:
Check that it's working:
And confirm the installation on the Ledger:
After clicking right, the app will get installed and you'll be able to open it on the compatible chrome app. For most coins, it's the Bitcoin app (even if you're trying to open your, let's say, Zcash wallet).
There's only a little problem with apps and the chrome extensions... They're a bit buggy.
More on that below.
How To Use Ledger Nano S With ERC-20 Tokens
A lot of people struggle to figure this out at first, but the Ledger is more than suitable for storing ERC-20 tokens, such as OmiseGo, or any other token on the Ethereum blockchain. The confusion probably lies in the fact that many people don't understand how ERC-20 tokens work.
So to give a very brief overview:
- An ERC-20 Token is any token issued on the Ethereum blockchain, which is a large majority of them.
- Any Ethereum address can receive ERC-20 tokens
- You need a wallet or device which supports ERC-20 tokens in order to view your balance, but even if it doesn't support them, they're still there.
So when you first set up your Nano and download the Bitcoin wallet, you'll also likely have downloaded an Ethereum wallet.
You can use that address (which starts with 0x) to send any ERC-20 token to, and they'll be in cold storage, just like Bitcoin and Ether tokens.
To send ERC-20 tokens to your Ledger Nano S, you just send them to the Ethereum address in your Ledger wallet, just like if you were sending ETH itself.
Now, in order to VIEW those tokens, you'll need to visit etherscan.io and enter your wallet address there. Once your tokens have arrived, you'll be able to see the balance in the "Token balance" section. See the image below. This is our Ledger's Ethereum address shortly after we sent some OmiseGo tokens to it.
Clicking on "View Tokens" shows us the balance of OmiseGo on this address, and the "Token transfers" tab lower down shows that they've arrived safely.
So receiving ERC-20 tokens to your Nano S is pretty straightforward, but how do you then send tokens from it?
Sending ERC-20 Tokens From Ledger Nano S
Sending Bitcoin and Ethereum is simple, because you have a "send" button in your wallet. ERC-20 tokens require you to login to Myetherwallet.com.
This is where the security features of a hardware wallet really shine.
With any other wallet, to login to Myetherwallet (MEW), you'll need to enter your private key or recovery phrase. This puts you at huge risk if you visit a fake version of the site, or if your laptop gets hacked.
With Ledger, you don't actually enter anything. Instead, you open your hardware wallet, and enter your PIN number on the actual Ledger itself. Because you're using phyical buttons on the Ledger, no hacker is going to find out your PIN either.
Only when you've connected your Nano to your computer and entered your PIN are you able to send tokens.
Once inside, you can use the Load Tokens button, and then choose the token you want to send from the dropdown menu, just like you would with any other wallet.
Remember, this is only for sending tokens. For Bitcoin and Ethereum, you just need to use the Send function in the corresponding wallet, which you can open by going to https://ledgerwallet.com/start and following the prompts.
Known Flaws (And Their Workaround)
It couldn't all be good. This wallet has some flaws but luckily, there's a workaround for both.
1. The Bitcoin app won't open
This is perhaps the single most common issue found with the Ledger. You connect your wallet, open the Chrome extension... and nothing.
It just won't recognize the Ledger no matter how many times you try.
On their support page, Ledger recommends uninstalling and re-installing the chrome extension and if that doesn't work, then doing the same for the app for the coin we're trying to access (nope, you don't lose your balance by doing so).
Well, that "solution" didn't work for us the only time we had that problem; but a good old computer restart did.
2. It can only "store" 4-5 different coins
A frustrating thing from this wallet is its memory limits. You can't really have many apps at once. So as soon as you want to keep more than five different coins on it, you'll need to uninstall an app to make space for another one. Sometimes, that won't work either and you'll need to uninstall ALL apps to reset the memory fragmentation.
Remember that you won't lose your coins by uninstalling an app or by setting your Ledger on fire. All you need is the mnemonic phrase, that's why it is SOOO critical that you DO NOT lose it.
VERDICT: Easy To Use, Super Secure, Well Worth The Price
Some people may be put off by the fact the device costs around 70 euros. That's understandable, but when your using it to keep a much larger amount of money secure, then it's a no-brainer.
If you have invested more than 100 USD into cryptos, and you don't plan to daytrade, then you should really get your tokens off an exchange, and onto a hardware wallet. In this case, the Ledger Nano S is our top pick.