Summary

Ledger Wallet is a bitcoin hardware wallet which secures private keys in a USB cable. This is a very cheap device offering a heightened level of security over standard mobile wallets.

However, the wallet is initialized online, offering a point at which malicious software can compromise private keys. Additionally, the need to type in a security code, though obfuscated by a separate “decoder” card, is susceptible to keystroke malware if the wallet is used often enough. If you have massive amounts of coin you would like to hold and have reason to believe you might be targeted / your computer is not squeeky clean, go with trezor. For everybody else, this is a nice little device that should do the trick.

How it works

The ledger nano requires syncing through an online computer, which is the point at which the product may be compromised by malware; therefore it is of utmost importance to ensure that the computer on which you initially set up your ledger is totally clean. Have you downloaded a movie or software from piratebay? Antivirus not up to date? Best to use a different computer, just to be safe.

Even better would be to use an entirely offline computer for private key sync up. Ledger does offer, at additional price, the “ledger starter”, which allows wallet initialization in an offline environment within a closed, usb-based linux environment. This allows the initial syncing to be done even on a computer infected with malware.

Assuming standard set up, head over to the chrome store and add ledger wallet to your chrome extensions. After you plug in your new ledger wallet, you will be asked to type a four-digit pin and confirm. This pin is meant as an anti-theft device, and if it is input incorrectly three times in a row the wallet will be frozen.

Once frozen, the wallet may only be restored by inputting a 24 word mnemonic, a mnemonic that is generated just after the user has input their pin code. Make sure that you have correctly recorded this 24 word passphrase in the recovery book provided – you will never be presented the passphrase again! Once recorded, and compared against the original to ensure accuracy, store this booklet in a safe, or behind a fake wall, or underneath a removable floorboard at some elderly relative’s house, hopefully underneath a carpet, which itself is underneath some piece of heavy furniture.

How to use the product

Once set-up is complete accessing the wallet is as simple as sticking ledger into a USB port and opening the extension and correctly tapping in the four digit pin. To send bitcoin – which can be done using QR code or pasting the long address – users must enter a validation code using a security card included with each ledger. The size of a credit card, this security card contains a different letter or number to correspond with alphanumeric digits.

The validation code interface will highlight four different digits randomly from the recipients bitcoin address, and the corresponding number on the security card must be entered by the user. This adds an additional layer of security – in order to hijack a user account without the security card, bad guys must either physically steal the card, or install finger stroke malware on a computer and wait for what could be an infinite amount of time until they have decoded the alphabet.

To receive bitcoin, you can either print or send your wallet QR code, or copy paste your bitcoin address. You might also stick in the amount required if you so choose.

Mobile

While sending bitcoin must be done through the chrome extension, Android and iOS companion apps are available to be used as 2FA devices rather than the security card. Payments are authenticated using push notifications on your mobile device. To set up your app, simply initiate a small transaction to your own address, which will open a window asking if you would like to pair a smartphone.

Clicking on this will open a QR code to scan with the phone, after which you will be presented four numbers to decode with the security card. Successfully decoding will pair the devices, after which you may confirm transactions.

Ledger is also apparently compatible with a few different mobile wallets, notably greenaddress and mycelium. After a lap around the web, we’ve found a number of complaints about the greenaddress integration, though it seems that after a recent update it now works properly. We will show below how to link up ledger to mycelium, and if you are insistent on using greenaddress instead, have a look at the video link.

To use mycelium as the front end for inbound and outbound ledger transactions, you’ll need to buy the Ledger OTG adapter to connect the ledger USB to your android device.

Open up your mycelium wallet and navigate to accounts. Click on the add key icon, and select advanced. You’ll find a “ledger” button – after you click it, plug in your ledger using the OTG cable and enter your pin.

Existing accounts will be imported and you may create additional accounts as desired. When the ledger is unplugged these addresses will be watch only, while transactions may be executed directly from mycelium when the ledger is plugged in.

Next Generation

Ledger blue, which is a lovely device offering a touchscreen, has a preorder meant to ship in March 2016. This preorder is meant more for developers, as the product is not yet complete, and ledger expects multiple firmware updates after delivery. The standard, tested product is meant to ship in the second quarter of 2016. However, if you would like to be amongst the early order guinea pigs, you will receive a 30% discount.

Conclusion

Ledger is a nice, cheap little usb device that, assuming your computer was not compromised during installation, offers greater levels of security than mobile wallets. The lack of second screen usage – the need to type in pin and security code on a desktop computer – is a definite shortcoming of the product, and it seems that the launch of Ledger Blue is acknowledgement of the fact. if you are looking for more security than your standard mobile wallets, and you don’t want to shell out more cash for trezor, this is a nice little piece of kit.

Protect your Bitcoins with Ledger Wallet!