My second Hardware Wallet review is another Ledger product: the Ledger HW.1, which stands for “Hardware Wallet”. It is a smart card device that holds a Bitcoin Wallet. It can be used as a single user, but can also be purchased in sets of 3 or 10 and used in a group situation using multisig. It has a very minimalist design and is meant to be a low cost storage solution. It also sells in “limited edition” with many of your favorite wallet software logos printed on them, like Copay or Mycelium.
Using a hardware wallet introduces multisig into your security repertoire. This means that, in order to spend your Bitcoin, you would need to set up the spend using your regular Bitcoin wallet and then plug in your Ledger wallet to approve the transaction. This means that a potential thief would need to steal the device on which you have your main Bitcoin wallet, your Ledger wallet, and the security card that comes with it. Without all three of these things your Bitcoins will stay put.
Inside the box there is a paper envelope containing an instruction sheet, a recovery sheet, and a security card containing a substitution cipher key. Be sure to store these things in a safe place. With these things a potential thief can restore your Ledger wallet to another Ledger device and sweep your Bitcoin to their own wallet. Also in the box is the Ledger HW.1 in a plastic card. Just pop out and assemble the Ledger HW.1. Notice: do not cut where it says clip. It’s telling you to fold that piece over and clip it to the other side. Otherwise it won’t fit in a USB port properly.
Before going any further, you’re going to need a piece of software. If you’re on a desktop computer running Windows, Mac or Linux you need to download Google Chrome for a browser. If you’re not using Chrome, you can get it from Google for free as well. Once you get that installed then get the Ledger extension. It can be found in Chrome’s web store. It is a companion application that lets you administer your Bitcoin wallet.
Set up is quite easy and so is syncing your Ledger wallet to your wallet software of choice. This will be your computer initially, but you can also sync it with your phone if your wallet software allows. Using it is as simple as using your wallet software. You send Bitcoin to the Ledger wallet to store it. To spend out of your Ledger wallet you set up the payment using your wallet software, but there are a couple added steps to approve the transaction. This includes inserting your Ledger HW.1 into the USB port of your computer or by using a USB OTG adapter with your phone, putting in your PIN, putting in the code using the security card, and approving the transaction. Again, these couple extra steps are a small price to pay for the much added security.
I would personally consider the Ledger HW.1 to be long term storage, as opposed to the Ledger Unplugged, so I would store the device, backup, and security card away and not carry them around. This would keep them all safe. However, as with the information that came with the Ledger Unplugged, I put the information on the recovery sheet and security card into the password wallet on my phone in case I lose any of it. It never hurts to have more backups.
One thing that’s different from the Ledger Unplugged is that you can create multiple wallets in the Ledger Chrome software and sync them all to your wallet software. This way you could use the Ledger HW.1 as a budget tool, saving for different things and such. I’m sure others could think of more creative uses for this, but my first thought was the envelope budget.
I’ve heard that many people have an issue with the fact that you have to use Chrome to initialize the Ledger HW.1 and the Ledger Nano. The only real problem I have with the Ledger HW.1 setup is that it does not appear to work with my Chromebook. It gets stuck, constantly attempting to verify the authenticity of my Ledger. This is kind of a bummer since my main computer is a Chromebook. I actually had to use my work laptop to get it set up and then sync it to my phone. Any changes I need to make like administering accounts and such has to be done through my work laptop and then I can sync them to my phone.
I highly recommend the Ledger HW.1 if you’re on a budget but are serious about storing your Bitcoin long term. But I’d recommend getting one of the limited edition ones, as they look nicer than the base model. As a single user, though, I’d splurge a bit and get the much nicer looking Ledger Nano. I also recommend the Ledger HW.1 if you’re in an enterprise situation and want to buy multiple Ledger HW.1 devices to secure funds with several custodians using multisig.