In the world of cryptocurrency, is of utmost importance.
With the increasing value and popularity of digital assets, the risk of theft and fraud is also on the rise. One of the most effective ways to protect your cryptocurrency holdings is by using a hardware wallet, also known as a cold wallet
Unlike hot wallets which are connected to the internet and therefore vulnerable to hacking, hardware wallets store your private keys offline, providing a secure and reliable means of storage. In this blog, we will explore the importance of using hardware wallets and how they can help safeguard your crypto investments.
There are several compelling reasons why people should consider migrating to cold storage for their cryptocurrency holdings in 2023. First and foremost, as the value and adoption of cryptocurrencies continue to grow, so does the potential for theft and fraud. With the increasing sophistication of hackers and cybercriminals, it's becoming more important than ever to take proactive measures to secure your digital assets. Cold storage solutions like hardware wallets provide offline solutions that makes it much harder for bad actors to gain access to your private keys and steal your funds. Additionally, with more and more financial institutions and traditional investors entering the cryptocurrency market, the need for robust security measures is only going to become more critical. By migrating to cold storage, you can ensure that your crypto holdings are protected and secure, no matter what the future holds.
With the recent collapse of FTX - one of the biggest crypto exchanges (which you might have heard of), crypto users worldwide woke up to the importance of storing their assets securely, and more importantly - in self-custody, meaning, we don't want to trust third parties to protect our assets.
Custodial services like Coinbase, Binance, CRYPTO.COM and many others are okay for a temporary use, but when it comes to long term safe-keeping or even short term, large amounts of cryptocurrency, you don't want that to be in the hands of someone else.
"Not your keys, not your coins" - you know that by now.
Throughout November-December 2022, in the aftermath of the FTX collapse, when every crypto exchange was rumoured to be the next in line to follow suit, users rushed to withdraw their assets from exchanges.
Many of us took our crypto into cold storage - the Google Trends Analytics shows that the searches for the term "hardware wallet" hit a peak in November and with that, sales of hardware wallets exploded.
And whether you're a first-time buyer or just want to diversify and use more than one devices, so you have even better protection, there are several factors to consider when choosing a hardware wallet.
So Here are the top 5 things to keep in mind:
1: Security
The most important factor to consider when choosing a hardware wallet is security. Look for wallets that use robust encryption and have multiple layers of protection, such as a PIN or password, two-factor authentication, and biometric authentication.
2: Supported Cryptocurrencies
Make sure the hardware wallet you choose supports the cryptocurrencies you want to store. Some wallets only support a limited number of coins, while others are more versatile and support a wide range of digital assets.
3: User experience
A hardware wallet should be easy to use and navigate, even for those who are new to cryptocurrency. Look for wallets with intuitive interfaces and clear instructions for setting up and using the device.
4: Reputation
Do your research and choose a hardware wallet from a reputable and trusted manufacturer. Look for reviews and feedback from other users to get an idea of the wallet's performance and reliability over time.
Hardware wallets come at different price points, so it's important to consider how much you're willing to spend. While some wallets may be more expensive than others, investing in a high-quality device is a small price to pay to protect your crypto investments.
Now, let's see how OneKey CLassic, the device I am reviewing here, fares on these points.
Let's start with the first one:
The device carries two secure chips: a Secure Element () and a universal chip () - and this goes for all their hardware wallets, not just the Classic, but the other models too. The MCU chip is mainly in charge of data communication, while the SE chip is mainly used for creating the Seed Phrase and Private Keys based on BIP-39 Standard, by a built-in RNG (Random Number Generator).
This makes the hardware wallet ultra secure against a vast majority of hacking risks on the internet. In fact, there was a glitch that was discovered early on, which was immediately fixed and I will talk about this with Sean later in this video, so we can be re-assured that there's no bugs or other exploits risks anymore.
More importantly, everything from 3D source files to PCB circuit boards, both software and firmware, are completely open sourced and can be found in their code repository.
If a wallet doesn't open source its code, I would worry that it's hiding a backdoor that could compromise the security of my assets.
Onekey's code is fully open-source, publicly hosted on , so anyone can inspect or use their code and this was also emphasized by Sean Han in our conversation that you will find in the video above.
of course, supports protocols. FIDO stands for Fast Identity Online and FIDO2 is the newest set of specifications from the FIDO Alliance. It enables the use of common devices to authenticate online services on both mobile and desktop environments, using unique cryptographic login credentials for every site - in this case, a physical device.
Essentially, FIDO2 is passwordless authentication.
Of course, you will use a pin code, to unlock your device, so you still have that personalised access protection, that you set up yourself.
is a priority too, and OneKey's servers do not store any private data about users and do not covet their personal information - this is also confirmed in our conversation with Sean, I made sure we talk about this too as I know that there were claims made in the past about wallets being able to restrict or even block users based on their IP address. This is not the case here, as Onekey does not collect any such data.
So far so good.
What else?
Supported cryptocurrencies.
supports all major platforms and blockchains, so you can switch to it from any other wallet, be it MetaMask, Phantom, Zerion, TokenPocket, imToken, KeepKey (which is what I'm actually doing, because my Keepkey malfunctioned) or any other wallet. Even LEDGER and TREZOR if you have issues with older devices.
The most straightforward way would be to migrate your seed phrase to this new device, so you automatically gain access to your accounts, but if you're using a custodial wallet, where you don't have a seed phrase, then you'll need to send your coins manually for each blockchain, like a regular transaction. I opted for the latter option simply because I used a software wallet when my KeepKey malfunctioned, and this is not safe enough. My computer has now some data stored, which could be a problem, so I did not sweep my seed phrase but rather, conducted manual transactions to move my coins from the older accounts to new ones on this device. It supports more than 43 blockchains and thousands of tokens and it works with web3 and DeFi platforms.
User experience.
I am amazed at how lightweight the device is, compact and easy to handle. It's super-light, I am amazed how light it is. It's only . Fun-fact, my crypto.com debit card, which is metal, is heavier than this device. If I say paperlight, it is not an exaggeration. It's also very thin, just 5.2 mm, which is about two credit cards thickness. If I put this in my shirt pocket, you wouldn't know I am carrying it at all.
Inconspicuous.
And yet, it's got a big enough screen to read wallet addresses in full, so I can double-and even triple-check everything before I authorise transactions. It has 4 buttons, making the navigation intuitive and easy. For instance, my Ledger Nano only has 2 buttons, so I have to use combinations sometimes pressing both, other times pressing only the right one... I know this has been a bit confusing for some of my friends. Here, there's no room for confusion, so that's good.
Also, in addition to supporting numerous coins and tokens - too many to even begin to list them, you can check the full list on their website, there's also support for transactions.
Then we come to Reputation, and this is where OneKey still needs time to gain more track record to be able to shine.
It's a fairly new brand that is only known in Asia so far, but since they're now starting to expand their global reach, this will change. Being based in Hong Kong, naturally, they cover the Asian region, where this is a popular device and I can point towards the fact that their recent series A funding came at a valuation of $85 million, helping them secure over $3 billion in value across 42+ chains, and have already processed over 14 million transactions without any issues.
Most importantly, their investors are all venture capital firms, of which the most well-known and prominent one is COINBASE Ventures.
This is in fact the only hardware walletCoinbase has invested, to date.
So, I think in regards to reputation, they are gaining that fast.
Now, if you want to get your hands on one of these for FREE - all you have to do is post comment on my video - https://youtu.be/dfk4POv9wKk and tell me why you need this device, what do you like about it so far?
This giveaway will run until Sunday 19 March, so hurry up, watch the video and leave a comment for your chance to get it for free.
So, to summarise what I've talked about here so far:
As first-time users, people get comfortable with custodial wallets because they seem easier to operate, but any third party, like an exchange, is in fact the keeper of your private keys and this is crucial, especially if the company controlling your custodial wallet becomes defunct or gets hacked. Non-custodial wallets add an added layer of protection, as you retain all control over your crypto. Since 2022 and the collapse of several centralized, custodial services, like Blockfi, Celsius, Three Arrows Capital and most impactful of all, FTX exchange, the community no longer trusts custodial wallets, and hardware wallets provide a ready-made non-custodial solution.
Holding your assets in just one place is never a good idea, which is why I use 5 different devices for my crypto holdings and I keep adding more as time goes by and as my capital grows.
I am actually replacing another, much older wallet device that I have been using for a long time, that recently malfunctioned, which is the good thing about these devices - if one gives up and you lose or damage it, you can just migrate your accounts to another. You don't have to worry about the device itself.
All you need to do is have your seed phrase - don't lose this please. Under no circumstances.
Make 10 backups of it if you need to, but Do Not Lose Your Seed Phrase. Ever.
Why OneKey?
Here are the things I like about this device:
First of all, it's ultra-light
I am really impressed by this and the fact that it's so thin makes it perfect for carrying around when I travel and I travel 7-8 months of the year, so this is important for me.
You can choose between 12,18 and 24 words seed phrase - most wallets don't give you a choice on that. Of course I prefer 24 words because this way I feel the security is tighter.
Blind Signing - this makes DeFi transactions easier to complete and it's a new feature that not many other wallets have, and it has an extra passphrase protection - if you want to.
Bluetooth connectivity means I can use it on the go and for some of you this might not be big deal, but I often sell Bitcoin at an exchange bureau where I have to do the transaction on the go, so this is why I care for this.
Another thing that impressed me is that this is the first the only hardware wallet company which Coinbase has ever invested in.
I also like that its code is Open Source.
Price-wise, it is cost effective and really affordable. It's cheaper than all of its competition in the same category - priced at $89, it is way less than half the price of Trezor Model T, almost half the price of Ledger Nano X and still much cheaper than other competitors like Ellipal, Keystone and SecuX - which are all great devices, no doubt.
But price is not the only factor. Support for DeFi, NFTs platforms is also important as well as the vast choice of blockchains and all their tokens that this device offers.
Top notch security - it carries double chips - MCU and SE
and lastly, it's easy to navigate with 4 buttons and a large screen. The app which you use to control the device is built for all main platforms : MacOS / Windows / Linux / IOS / Android / iPad OS/ Chrome Plugin / Firefox Plugin / Edge Plugin... it's all covered.
In my next video I will take you through the steps of setting it up, so if you're considering getting this wallet, make sure to catch this tutorial.
And just to remind you again, I'm doing a raffle for one of these devices on my YouTube channel, so get down with the comments - tell me why you want one of these devices, what do you like about it?
I will run this until Sunday 19 March, so hurry up and leave comments on my video. I will announce the winner in my Monday episode next week.
Good luck to all who choose to take part in this raffle!
Till next time. Peace!
