Cryptocurrencies, NFTs, and DeFi have opened up a new world of possibilities for many of us. Now we can become part of the creator economy by selling or collecting NFTs, enjoy a low barrier to entry for investments, and make profits through yield farming, to name a few of these new opportunities.
But what good are all these if one day you lose your hard-earned crypto assets? What we all need is a secure blockchain experience. Crypto wallets are indispensable in this regard. Their primary job is to secure your holdings by storing your private keys.
As you probably already know, there’re mainly two classes of crypto wallets. The first type are software wallets (hot wallets) that you can download online and use as a browser extension or mobile app. They have a direct connection to the internet.
The second class includes hardware wallets (cold wallets). These are physical devices that protect your private keys offline, so unlike software wallets, your assets are inaccessible to online attacks. For this reason, they’re generally considered more secure.
The Nightmare of a Hardware Wallet Owner
The greatest weakness of hardware wallets stems from their greatest strength: they’re vulnerable to physical attacks.
The ultimate goal of hackers is to get your private keys. Should they steal the device itself, there are numerous ways they can also steal the keys. Your hardware wallet must withstand these attacks to safeguard the most critical data from the bad players.
Ledger is one of the most popular and trusted hardware wallets. Let’s take a look at how the leading wallet provider mitigates hacking risks.
Ledger’s Security Element Chips
The chips used in a device are the actual place where the private key data is stored. Some chip types are more secure than others. Ledger wallets use advanced chip types known as Security Elements (SE). In fact, Ledger devices are the only wallets that use SE to store private keys.
These chip types are commonly found in passports, credit cards, and sim cards. They have an extra layer of security that standard chips lack, which makes the wallet more secure against hacks.
Take a side-channel attack, for example. This is a type of fraud where hackers who have physical access to your device can measure its power consumption while it is performing a transaction. In other words, they try to capture its emissions. They then match this consumption pattern with an entry in their database that corresponds to your private keys. Secure Element chips have a special design that hides electromagnetic radiation and power consumption. Their emissions cannot be picked up by others, so your keys are protected.
Another fraudulent activity can be a power glitch, which is a temporary power failure. Here, hackers cause a hardware fault by manipulating a circuit while it’s running. They do this by using high-voltage current bursts. The result is that the device gives a false output and allows the attacker to access sensitive data. Security Element chips have built-in fault detection mechanisms to prevent such fault attacks.
How Do You Navigate Signing Smart Contracts?
Let’s take a look at another security issue that is common in the decentralized world.
Whenever you want to interact with a web3 site, such as a decentralized app or NFT drop site, you’re prompted with a signing request to connect your wallet to the site. Whether you want to buy an NFT on OpenSea or try out a play-to-earn game, this is a necessary step to complete transactions.
Here is the caveat. When you confirm the authorization request of a decentralized app (dApp), you digitally sign the smart contract on which it runs. In most cases, this step is a blind-signing process. In other words, you don’t actually see the terms of the smart contract.
Even if the smart contract data is available, it’s written for computers, so most of us can’t understand it. Fraudsters exploit this fact by altering the smart contract so they can steal the funds.
Ledger provides a secure way to interact with the dApps by making this process transparent. You see the full transaction details of the smart contract on your wallet’s display. Ledger achieves this through integrations with specific web3 applications that are constantly being added to its Apps Catalog. Users know they can sign securely if a specific dApp exists in the catalog.
Your Ledger wallet is integrated with Ledger Live app.
Ledger Live is More than an App Catalog.
The Ledger’s Apps Catalog is a secure gateway to web3 and is part of a larger ecosystem which is known as Ledger Live. Every Ledger device comes with the Ledger Live app to provide the best possible security solution for storing your crypto holdings while simultaneously keeping up with the speed of web3.
Ledger Live is an app that acts as an interface to visualize your portfolio and access dApps. It currently allows you to manage over 1800+ coins. Both PC and mobile versions are available.
An important aspect is that Ledger allows developers to build their blockchain apps on Ledger Live. This feature enables new blockchains to be integrated with Ledger Live, making it possible to visualize and manage new crypto assets running on them. In this way, Ledger and its users can evolve with web3.
Ledger is a key player among those working to create a secure environment for web3 users. The technologies presented in this article help surf the decentralized world with peace of mind.