What is a Ledger Wallet?
A ledger wallet is a brand of cryptocurrency hardware wallet. They are manufactured by a company of the same name, Ledger.
The Long Definition
Ledger wallets are hardware wallets made by Ledger. The company is headquartered in Paris, France. It was launched in 2014 by eight experts “united around the idea of creating secure solutions for blockchain applications.”
Ledger offers two hardware wallets: the Ledger Nano S and the Ledger Nano X.
How Do Ledger Wallets Work?
It’s usually said that crypto wallets “store” crypto coins and tokens. Well, that’s not exactly accurate. This is because, at the technical level, crypto wallets don’t store any assets within them. All crypto coins and tokens live on the blockchain as bits of data. So, how do you see an amount when you check your wallet balance?
Each coin/token is associated with a particular blockchain address via cryptography. Your particular address is stored in your wallet as the public key. What your wallet does is find all the coins/tokens on the blockchain that are associated with your public key. It then sums them up and displays the totals to you.
Your crypto wallet also stores something else of great importance; private keys. These keys are cryptographically linked to your public address such that they act as proof of ownership of the crypto associated with your address. Because of this, your private keys are used to sign transactions conducted with your wallet.
Undoubtedly, the above is true for all crypto wallets, including Ledger ones. But the difference comes in how the private keys are stored. In regular wallet applications, private keys are stored online. And with enough determination, it’s quite possible to hack and access anything that’s stored online. This makes wallet applications quite risky, especially for people storing huge amounts of crypto.
Ledger wallets (and other hardware wallets) are designed to solve this problem. They are USB storage wallets that keep your private keys offline. This makes it extremely difficult for hackers to steal your private keys.
How to Use a Ledger Wallet
To use a Ledger wallet, you have to connect it to a laptop/computer that’s connected to the internet. From there, you can open Ledger’s custom application to access your crypto and conduct crypto transactions.
Ledger wallets also use a seed phrase and a pin/password. You’ll need the latter every time you open your Ledger wallet. It serves to prevent unauthorized access in case someone else gets their hands on your wallet.
If the pin/password is the key to your Ledger wallet, then the seed phrase is the master key. This is a series of 24 words that serve as the ultimate proof of ownership of a crypto wallet. It can be used to recover your wallet in case you lose or damage it. This is why it’s known as the backup phrase.
The seed phrase grants the holder full access to a wallet and all its associated funds. Therefore, it’s important that you don’t lose it or share it with anyone.
Ledger offers two main wallets: Ledger Nano S and Ledger Nano X.
The Nano S is the older of the two. Ledger introduced it in 2016 as their first hardware wallet. Today, there is a more improved version – Ledger Nano S plus. The Nano S plus supports NFTs, more than a thousand coins, and can store up to 100 different apps.
The Ledger Nano X is a higher-end version introduced in 2019. It has more features than the Nano S and almost the same features as the Nano S plus.