The appearance of Bitcoin and other cryptocurrencies has significantly influenced international economy. Direct money transfers, transactions simplicity and anonymity have prompted cryptocurrency support by many international companies and appearance of and the appearance of various start-ups in various spheres.

But the comfort together with the absence of universal cryptocurrency transaction processing centre has caused the necessity of increased security actions for Bitcoins saving, optimum protection from unauthorized access or theft by third parties.  Encryption and passwords usage is not able to fully solve this problem. This fact has been confirmed by various thefts of bitcoins. One of the ways of transactions safety increase is a specifically designed wallets in form of external devices connected to smartphone or PC.

Advantages and drawback of hardware wallets

The advantages of hardware wallets are obvious:

• Support of all cryptowallets types:
  • «thin»: joints with complete clients such as (Electrum, MultiBit) are used for transactions confirmation
  • «thick»: the base of all transactions is at PC (Armory, Bitcoin Core);
  • On-line wallets functioning via web sites (My Wallet, Circle, Coinbase, InstaWallet).
• Software for main OS, including Android and iOS.
• Software modification allows the usage of any type of cryptocurrency
• Connection and usage simplicity
• High level protection of closed key.

If to take into account the drawbacks of such wallets it is worth mentioning that the most significant one is the risk of device loss and further difficulties about access restoring. The other ones are too small to be mentioned. Moreover the issue with access restoring can be solved easily as all developers provide their software with back-up function. At the same time you have to take up safety precautions concerning back-up files and save them to a separate USB drive.

Make sure about the absence of limitations for Bitcoin and other cryptocurrencies usage together with other related transactions before purchasing hardware wallet. The same concerns the usage for information encryption of uncertified devices i.e. most of hardware wallets. One way or another find below the description of the most popular hardware Bitcoin wallets.

Trezor

Trezor is considered to be the most popular «Iron» Bitcoin wallet. This wallet was the first one who has been used by the users in 2013. It became popular due to the name of his author Marek Palatinus – slush developer of first pool and group mining concept. Trezor is a highly reputable wallet with good combination of transaction security and functionality.

The hardware wallet is a little bit bigger than common credit card. It is connected to gadget via USB port. It is supplied in aluminium or plastic body.

Trezor wallet has the following features

• OLED display for transactions control and additional confirmation;
• Double protection of closed keys: encryption and password
• Back-up feature;
• Option of information remote deletion in case of wallet loss.

This hardware wallet is equipped with rather original protection by PIN code. When the password entered is incurred the latency period for next launching is doubled. One can enter more than six thousand options of PIN code by thus making direct selection of symbols combination almost impossible.

Trezor developers have been constantly improving the wallet security despite the fact that Trezor reliability in this issue has been confirmed by users experience and independent testing around the world.

 You can order Trezor via buytrezor.com web site. Company offers free delivery to any country of the world.

BWALLET (Trezor clone)

The Bwallet hardware wallet has been developed by Chinese via Trezor open source software. The software is fully compatible with new project version and web site add-ons available at original product web site – MyTrezor.com. This clone doesn’t differ much in functionality of its original prototype. The difference lies only at the price and exterior.

 You can purchase this hardware wallet at their official web site, having paid for delivery in plus.

BTChip HW-1

The hardware Bitcoin wallet BTChip HW-1 is a smart card with USB connection allowing the usage of any existing cryptocurrency.

The features of BTChip HW-1 are the following:

•  The option of transactions completion right after  card connection to PC via USB port without the necessity of additional drivers installation – the device contains all required software;
• Electrum and Green Address wallets support;
• API for developers;
• Transactions confirmation via two stage password protection with the help of which closed keys never «come out» of device;
• Information automated deletion if incorrect password entry three times;
• Automated creation of back-up copy after first transaction;
• The most compatible to Google Chrome.

BTChip HW-1 wallet purchase is possible only via official web site .

PC safety experts advice using such hardware wallet for small transactions only. They explain such recommendation by the presence of only password protection in HW-1 and such password protection is not sufficient. Besides this transaction confirmation is possible only after card is connected to PC. This configures it as trusted source by thus significantly decreasing money transaction level.

Ledger Wallet

Ledger Wallet hardware Bitcoin wallet is the most protected wallet for cryptocurrencies transactions according to its developers. The developers of BTChip, who have created HW-1 wallet described above and Chronocoin cryptosystem have the same opinion.

Ledger Wallet has the following advantageous features:

• EAL5+ based standards protection used in bank sphere for the protection of smart and plastic cards;
• Original algorithm of transactions confirmation;
• Feature of non standard restoring of wallet access;
• Feature of several bitcoin wallets keeping.

After hardware wallet connection to USB port it will ask specific code being the part of device content. Afterwards it will ask the creation of unique PIN code. The combination of these two code phrases will allow the creation unlimited amount of public addresses and private keys and is the basis of wallet restoring algorithm. Then the wallet will install specific plug-in for Google Chrome browser and user will get access to Ledger Wallet fucntional.

While user can keep bitcoins at spefici deposit account, provided by developer’s company.

Ledger Wallet contents consists of two plastic cards used for transactions confirmation.  The transaction conducting is possible only after entry of password from one of the cards. This is additional precaution measure during wallet usage and PC protection from remote access by hackers. Hardware wallet does the processing of all keys and password via the functions of protected operational system Ledger OS.

This software has been created for popular operation systems like OS X, Linux, Windows, Android and iOS. The Ledger Wallet cost makes 29 euro plus the delivery fees. You can download application and required documentation at GitHub. You can download developers API there as well.

Pi Wallet

The hardware wallet PiWallet has been developed on the basis of micro PC Raspberry Pi,. SD cards supposed to be used for information storage. Due to this fact Pi Wallet has become one of the few completely autonomous solutions of cryptocurrencies wallet. You can even install your own built of operation system.

This device doesn’t have original design and portability. It is connected to Internet via Ethernet or optional Wi-Fi and works with the help of Armory software. The transactions’ conducting is done without closed keys transfer.

The Pi Wallet consists of two SD cards. One of SD cards contains information back-up copy. This hardware wallet can be supplied with Raspbian operation system besides Armory. This enables developers to create own security configurations and software solutions.

You can purchase Pi Wallet via the company official web site. Users can download all required technical documentation and contact developers’ technical support.

Some experts about cryptocurrency usage consider that the price of this device is too high and it has insufficient level of security.

BitStash

BitStash wallet consists of three components- main wallet, external storage device for transaction information saving and mobile version.

External storage is presented in form of USB device supplied with double information encryption using LUKS algorithm. It requires the connection of main wallet for balance refilling and transactions conducting.

Mobile version is presented in form application for Android and iOS and is frequently used for small sums transactions conducting. Closed keys are stored at main wallet, while mobile transactions are done via BIP32 algorithm of one –time unique addresses.

BitStash simultaneously uses three technologies for money transactions confirmation:

• PIN-code;
• Color capcha;
• Text captcha.

Mobile version is equipped by additional two factor user’s autentification Bluetooth channel. The device is equipped with the function of data remote deletion in case of wallet loss or attempt of unauthorized access.

Non -implemented projects of hardware wallets

Like in every sphere, the sphere of cryptowallets is not an exception, not all developers have managed to lead their creations till the levels of commercial programs. Some of them lacked management and engineering skills, while others simply lacked money. One way or another they have representation in Internet and the two ones below are worth specific attention.

Bitcoincard (Mycelium)

This hardware wallet has been developed based on smart card. Bitcoincard differs from others by the presence of radio connection for Bitcoin transactions conducting. The wallet contents contains specific gateway connected to the PC or mobile device for information transfer/acceptance.

The crypto currency transfer between Bitcoincard cards is possible by means of direct radio connection between devices. In such case the transactions are conducted without confirmation and are immediate after connection to Internet.

Digital signatures are stored directly at smart card without transfer to other devices. The device operates without operational system and its uses doesn’t foresee software network loading, by thus making the wallet extremely capable for the protection from unauthorized access.

 The project has been officially closed in 2013, though the developer’s web site is still functioning

Bitsafe

Butterfly Labs is known for a rather damaged reputation on the sphere of mining devices manufacturing. Though this fact doesn’t impede her from collecting pre-orders for Bitsafe hardware wallet.

This wallet technical specification is not available in full. Bitsafe reminds standard plastic card and is equipped with sensor screen. The multi-signature function is activated after transaction conducting. The camera is designed for QR codes scanning.

 The final device built should have been equipped with data complete back-up to MicroSD. This feature has made wallet access restoring possible in case of loss or Bitsafe malfunction. The device is charged from solar batteries and doesn’t need connection to PC. The initial value of hardware wallet was 150$, but afterwards the pre-orders have been stopped.

Butterfly Labs have already been run into the issues of product delivery and investigation of company activity by FTC (Federal Trade committee in US). In 2014 the BFL had been closed till trial termination but the company had been re-opened in four months. According to the insiders’ information the developer has started to sell its assets and will not be capable to return to market

Summary

The hardware wallets is rather young market segment and most part of such devices is under stage of experimental developments. Such wallets are easy to transport by thus making them indispensable for travelers conducting the crypto currencies transactions. They are safe and convenient but are vulnerable like all Types of bitcoin wallets. We can recommend Trezor and Ledger as they are most reliable, professional and safe devices.

It is also worth mentioning that «iron» wallets are not autonomous in most cases and don’t need to be connected to mobile gadget or PC. They are easy to be lost and are not impossible to be restored without back-up copy. It is extremely important that is why we recommend storing it at on-line device in a safe place. Please mind the following precautions:

• Safe work in OS;
• Information encryption;
• Password storage in a safe place;
• Gadget access differentiation.