Coinbase users have excitedly been buying up Litecoin on Coinbase because it is the cheapest cryptocurrency they could purchase compared to bitcoin and ethereum. Cryptocurrencies have been increasing in value tremendously due to increased awareness. Here are the important things you need to know about how to chose the best litecoin wallet.
Ledger Nano S
What is the best litecoin wallet
The best litecoin wallet needs to be easy to use, secure, have an easy recovery process, and be easy to transport. Both the TREZOR Wallet and Ledger Nano S are the two most common hardware wallets to store LTC because of their price, security, and availability.
Our two competitors for the best litecoin wallet are the TREZOR Wallet and Ledger Nano S. These are by far the two most popular hardware wallets on the market. You can read our full review where we put them head to head against each other to decide which one is the best all around winner.
The best litecoin wallet should be extremely secure. While that sounds like a very broad statement, these are the key questions you need to ask before purchasing a hardware wallet.
- Are my private keys generated offline?
- Is the software open source?
- How does the recovery process work?
- How does it handle brute force attacks?
Why do my private keys need to be generated offline?
Blockchain technology utilizes public key cryptography to store private information on a decentralized public infrastructure. In order to make storing information out in the open possible you need high levels of encryption, and a way that only you can access it.
The public key / private key solution works here. Your private key is derived using a hash function from your public key or public address (they are interchangeable). Think of your private key as your password. It is important that your private key is ever exposed to anyone because if they have access to your private keys, they can move your crypto out of your wallet.
Web based wallets or any centralized holder of your private keys (Coinbase, any exchange, etc.) are susceptible to hacking. If your funds are stolen, there is no authority for you to go to to get your funds back. This is why it is so important that your private keys are generated offline, directly onto a device that only YOU can see.
Why is open source software important?
It is important that any hardware wallet you chose has an open source repository of their code base. Following in the same open source nature of cryptocurrencies like bitcoin and litecoin, it is important that experts in the community can verify the levels of security for a device.
There are even some instances where even hardware wallets cannot be trusted. There was a recent issue where someone bought a Ledger Nano S from eBay and had their funds stolen. The seller generated the private keys and kept them for themselves, then sent a fake recovery sheet and scammed the buyer out of $35,000 as of this writing.
A hardware wallet is only as good as the security of your private keys. Being able to properly recover your cryptocurreny is critical because losing your hardware wallet shouldn't mean that all of your crypto is gone. That is where the 24 word recovery seed comes in to play.
We highly recommend storing your 24 word recovery seed in a fire proof safe and a safety deposit box. This is a great way to properly protect your investment. The BEST way to recover your crypto is to memorize your 24 word seed. It is not very difficult with some repetition and memory tricks.
The recovery process in the TREZOR vs Ledger debate is a stalemate. Both of them have a fairly smooth recovery process. Simply reset your hardware wallet as new or use the restore backup function and enter your 24 word recovery seed. The funds will be restored instantly.
Test this process with a small amount of crypto when you first move litecoin onto the wallet. You need to make sure that you copied down the recovery seed correctly because if you do not, your LTC is gone forever. You also need to TRUST that this function works. Cross your fingers and give it a shot, it works.
Brute Force Attacks
You want to make sure you hardware wallet can withstand a brute force attack. A brute force attack on a hardware wallet would be attempting to unlock the wallet by trying a number a different pin codes until it opened.
The Ledger Nano S will lock you out of the device after a few missed entries of the PIN. If your hardware wallet is stolen, someone has 3 chances to unlock the wallet. We suggest you use more than 4 digits in your password, and nothing too obvious.
The TREZOR Wallet takes a slightly different approach to brute force attacks. After inputting an incorrect PIN code, the TREZOR will increase the time between PIN entries by a factor of two. It would take someone six days to try twenty different PINs because of this.
Securing your private keys is the most important thing you need to learn in the crypto asset space. The best litecoin wallet should be extremely secure because LTC is rapidly increasing in price and should never be left on the exchange.
The TREZOR Wallet had one security issue in 2017 where the device could be hacked if you physically had the device. This issue has since been addressed via firmware update. The github repository for TREZOR will explain the fix.
In terms of security, we would estimate that both wallets are equally secure. While the Ledger Nano s doesn't have any strikes against it, both wallets developer team would address any issue swiftly.
Hardware Wallet Setup
Setup process is a critical step in choosing the best litecoin wallet. The setup process can be a little stressful the first time around. Writing down your seed and configuring your wallet is a new task for most of us. Both TREZOR and Ledger do a great job of making the setup process simple and straight forward.
Ledger Nano S Litecoin Setup
Boxmining does a great job at helping you through the setup process in this video. We also have provided instructions on setting up your Ledger Nano S here in our full review. Your Nano S will already come with the Litecoin app on the device.
TREZOR Wallet Litecoin Setup
The TREZOR Wallet setup is very easy thanks to the web-based wallet. Simply go to TREZOR.io and plug in your device to get started.
Having a slick user interface is important when deciding which is the best litecoin wallet. Interacting with the blockchain will be as easy to use as Venmo because of the increased adoption of cryptocurrencies. Right now we still need the somewhat complicated nuts and bolts described as public and private keys in order to send and receive transactions.
Litecoin TREZOR Wallet
The folks over at TREZOR have a much more robust user interface than what the Ledger Nano S provides. The interface allows you to easily switch between accounts and add new accounts (think checking and savings). It also gives you a bar graph showing how much LTC you have and its corresponding transaction history.
Sending and Receiving Litecoin with the TREZOR Wallet
Sending and Receiving LTC is extremely easy because of the TREZOR Wallet's intuitive web interface. We wrote up a full guide on how to send LTC to your TREZOR Wallet that. It is especially helpful if you are sending LTC from Coinbase.
I like that TREZOR provides great instructions on how to convert LTC addresses to the correct format to use SegWit.
Switching back and forth between your public address (receiving tab) and the send function is very straight forward. Simply click on the Receive button and copy your public address and paste it into the exchange or wallet you are sending from.
Litecoin Ledger Nano S
The litecoin wallet on the Ledger Nano S is different than the TREZOR Wallet. Ledger's have native wallet applications that you need to download directly to the device. This wallet then corresponds with a software wallet on your desktop that acts as the interface.
What I don't like about the LTC wallet for the Ledger Nano S is that you actually need to use the bitcoin wallet app as a proxy for the litecoin wallet. The same goes for dash. This was extremely confusing to me at first, but now it doesn't bother me.
The fact that accessing the litecoin wallet needs an explanation isn't a good thing. Other than that, the wallet functions just was well as the TREZOR Wallet, and is arguably easier to use.
Once inside the LTC wallet, you'll notice that the ledger interface is very simple and sleek. It lacks the graph that may or may not be useful to you and the rest is strikingly similar. The send and receive features are similar for both the Nano S and TREZOR Wallet.
Best Litecoin Wallet - Winner
Both the TREZOR Wallet and Ledger Nano S are great choices for storing your LTC. The fact that you are choosing to use a hardware wallet to store your crypto is the most important thing. The best litecoin wallet is the Ledger Nano S, even though it uses the bitcoin wallet software application on the desktop, is the best overall hardware wallet for litecoin.
It is typically cheaper than the TREZOR if you order direct from Ledger instead of on Amazon, but can sometimes see long shipping delays. You may pay almost twice as much on Amazon due to increasing demand and low supply. If you are determined to purchase on Amazon, just keep checking back for the best price. Anything close to $100 on Amazon is a good deal because it is close in price to what you would pay direct from Ledger.
Ledger recently closed a $75 million dollar round of funding which makes it one of the most valuable cryptocurrency startups in the market. They also had over 1,000,000 units sold in 2017, compared to just 30,000 in 2016. This tremendous growth and recent funding will be used for R&D and scaling their operations.