Every cryptocurrency transaction needs to be signed with a private key. So, to interact with your funds you either need to memorize your key or you need to store it somewhere safe that you can easily get to. The problem is this key is near-impossible to remember and it shouldn’t be stored anywhere insecure.
Luckily there are devices that have been designed to help us out: hardware wallets.
What makes a hardware wallet secure?
There is specifically designed hardware to store secrets in an isolated environment, such that software malware and virus do not have any interaction with it. In the Ledger Nano S, this hardware is called the ST31H320. It has been designed by ARM for secure ID and banking applications.
Transactions are signed inside this hardware, so your private keys are never exposed outside its secure environment.
Three other factors help secure the Ledger Nano S. First, a pin entry is required by the user. Second, an attestation test is performed, making sure the ST31H320 is working correctly. Third, there is a screen on the Ledger Nano S is used to verify the recipients address.
How to set up a Ledger Nano S:
1. Plug the device into a computer and see the screen which says “Configure as new device?’ Select yes.
2. Enter a unique pin. Do not reuse a pin from another app, your phone lock, or your ATM pin. Make sure you can remember this pin.
3. Next you will be asked to write down your 24-word recover phrase. Make sure you write the words down in the same order they are displayed.
3a. Never store these words on a computer or take a picture. These words hold all the power with your wallet. If anyone gets them, they have full access to your funds. Store this piece of paper somewhere safe, dry, and where you wont forget. Take your time with this, there is no rush.
4. In Google Chrome, open up https://www.ledgerwallet.com/ and navigate over to ‘apps’ and download the chrome extension for bitcoin & altcoins.
5. After installing and signing in you are able to send and receive bitcoin.
Important things to note:
Always double-check the address you are sending your crypto to from the Ledger Nano S. The computer screen should never be fully trusted. It is possible for it to display a different address then where it is actually sending the funds. If you want to read more about man-in-the-middle attacks, you can read this article.
Make sure the recovery words will be able to be read in 25 years. Use a pen and never show this piece of paper to anyone. Do not leave it somewhere it could easily be destroyed.
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