Paper, Software, or Hardware: Why Trezor Beats Ledger for Cryptocurrency Security
Summary
TLDRIn this video, the speaker discusses their journey with cryptocurrency, focusing on security and the evolution of their wallet choices. Starting with software wallets, they transitioned to Ledger hardware wallets for added security, appreciating the secure element and transaction confirmation features. However, they express concerns about Ledger's reliance on a central authority for recovery keys. The speaker then introduces the Trezor Safe 3, highlighting its open-source nature, secure element, and the innovative Shamir Shard feature for splitting key recovery into multiple pieces, enhancing security. The video is a blend of personal experience and a deep dive into the technical aspects of cryptocurrency wallets.
Takeaways
- 😀 The speaker is transitioning from using Ledger hardware wallets to Trezor Safe 3 for enhanced security.
- 🔒 The speaker has always been interested in cryptocurrency from a cybersecurity perspective and has been involved since 2010.
- 💡 The speaker uses a hot wallet for active transactions and a semi-cold wallet for longer-term storage, in addition to paper wallets for long-term holdings.
- 🛡️ Ledger wallets were chosen for their secure element feature, providing anti-tamper protection, which Trezor lacked initially but has now incorporated in the Safe 3.
- 📈 The speaker started with software wallets and paper wallets but moved to hardware wallets for better security against online threats.
- 🚀 The original Ledger Nano S was appreciated for its simplicity and secure element, but the speaker upgraded to the Nano X for its ability to hold more cryptocurrencies.
- 🔋 Disadvantages of the Ledger Nano X included a battery, which had issues, and Bluetooth connectivity, which the speaker does not favor for security reasons.
- 🛠️ The Trezor Safe 3 was chosen for its open-source nature, secure element, and the ability to create a more customized and secure setup.
- 🔑 The Trezor Safe 3 introduces the Shamir Shard feature, allowing for the splitting of a key into multiple parts for enhanced security.
- 🔄 The speaker dislikes Ledger's reliance on a central authority for recovery keys and prefers the self-sovereignty offered by Trezor's open-source approach.
- 🔄 The speaker emphasizes the importance of tinkering and learning about the technology behind cryptocurrencies rather than just focusing on financial gains.
Q & A
Why is the speaker interested in cryptocurrency?
-The speaker is interested in cryptocurrency due to their fascination with digital money, its security, transferability, and the technology behind it, rather than for financial gain.
What are the different types of cryptocurrency wallets the speaker uses?
-The speaker uses three types of wallets: a hot wallet for active use, a semi-cold wallet for storing cryptocurrencies long-term and making trades, and paper wallets for exclusive long-term holdings.
Why did the speaker initially choose Ledger wallets?
-The speaker chose Ledger wallets because they included a secure element, which provides additional protection against tampering, and because they offered a simple and reliable way to secure their digital assets.
What are the main differences between Ledger Nano S and Ledger Nano X?
-The Ledger Nano S can hold only 4-5 cryptocurrencies at a time and has no battery or Bluetooth capability, whereas the Ledger Nano X can hold up to 127 cryptocurrencies, has a battery, and supports Bluetooth connections.
Why is the speaker moving from Ledger to Trezor?
-The speaker is moving to Trezor because the new Trezor Safe 3 includes a secure element, offers more open-source options, and avoids the need to rely on another company's infrastructure for key management.
What security measures does the speaker use for their seed phrases?
-The speaker uses a steel tablet to store their seed phrases, anti-tamper stickers for added security, and sometimes splits the seed phrases into multiple parts (shards) to enhance security further.
What is a Shamir Shard and why is it useful?
-A Shamir Shard splits a seed phrase into multiple parts, requiring a minimum number of parts to recover the full seed phrase. This adds a layer of security by distributing the parts to different locations, making it harder for someone to steal the entire seed phrase.
What are the speaker's thoughts on Bluetooth and batteries in hardware wallets?
-The speaker is not a fan of Bluetooth or batteries in hardware wallets, as they believe Bluetooth is not secure and batteries can fail or cause issues, preferring simpler, more reliable devices without these features.
How does the speaker feel about the open-source nature of Trezor wallets?
-The speaker appreciates the open-source nature of Trezor wallets, as it allows for greater transparency and the ability to build or modify the hardware and software independently if desired.
What is the speaker's overall approach to cryptocurrency and security?
-The speaker approaches cryptocurrency from a cybersecurity and technology perspective, focusing on the security and architecture of digital assets rather than on speculative financial gains.
Outlines
🔒 Introduction to Ledger Wallets and Cryptocurrency Security
The speaker begins by introducing the topic of cryptocurrency security, particularly focusing on Ledger hardware wallets. They share their longstanding interest in cybersecurity and digital money, emphasizing a practical approach rather than speculative enthusiasm. The speaker explains their use of multiple Ledger wallets for different purposes: a 'hot' wallet for active transactions, a 'semi-cold' wallet for longer-term storage, and paper wallets for even more secure, long-term holdings. They provide background on their experience with Bitcoin and other cryptocurrencies since 2010, discussing the evolution from software wallets to more secure hardware solutions.
🔄 Ledger Wallets: Evolution and Preferences
The speaker discusses the progression of their use of Ledger wallets, starting with the Nano S and moving to the Nano X. They explain the limitations of the Nano S, which could only hold a few cryptocurrencies at a time, leading them to upgrade to the Nano X, which supports up to 127 cryptocurrencies. However, the speaker expresses concerns about the Nano X's built-in battery and Bluetooth capability, which they perceive as security risks. They prefer the simpler Nano S Plus for its reliability, secure element, and lack of unnecessary features. The speaker concludes by outlining their multi-tiered wallet system: a hot wallet, a semi-cold wallet, and paper wallets for different security levels.
🔧 Transitioning to Trezor and Enhanced Security Measures
The speaker explains their decision to transition from Ledger to Trezor wallets, particularly the Trezor Safe 3, due to its open-source nature and inclusion of a secure element, addressing concerns they had with Ledger’s security practices. They appreciate the transparency and customization options Trezor offers, including the ability to build a wallet from scratch using a Raspberry Pi. The speaker also discusses the initial setup process for the Trezor wallet, which includes installing firmware, and highlights the security features like anti-tamper seals and secure USB connections. They also critique Ledger's reliance on proprietary systems, which limits user control over key management.
🔐 Introducing Shamir Sharding for Enhanced Key Security
The speaker introduces Shamir Sharding, a security feature available with Trezor that allows a user to split their recovery seed into multiple shards, requiring a minimum number of shards to restore the wallet. They explain how this method enhances security by distributing the risk, making it harder for a single point of failure to compromise the wallet. The speaker unboxes the Shamir Shard kit, explaining its components and how it works. They express excitement about exploring this feature further and emphasize their interest in cryptocurrency technology rather than speculation. The speaker concludes by wishing the audience well and encouraging them to focus on the technology behind cryptocurrency.
Mindmap
Keywords
💡Ledger Hardware Wallets
💡Cryptocurrency
💡Seed Phrase
💡Tresor Safe 3
💡Hot Wallet
💡Cold Wallet
💡Paper Wallet
💡Shamir Shard
💡Secure Element
💡Open Source
Highlights
Introduction to security upgrades and the speaker's transition from Ledger to Tresor wallets.
Background on the speaker's interest in cryptocurrency, cyber security, and digital money.
Explanation of the different types of cryptocurrency wallets: hot wallets, semi-cold wallets, and paper wallets.
Detailed overview of the speaker's use of two Ledger wallets, each with independent seed phrases.
Introduction to paper wallets for long-term cryptocurrency holdings.
History of the speaker's involvement in cryptocurrency since 2010-2011.
Description of the early use of software wallets like Bitcoin Core and Dogecoin Core.
Transition from software wallets to hardware wallets for improved security.
Advantages of Ledger wallets, including the secure element for anti-tamper protection.
Comparison of Ledger and Tresor wallets, highlighting the open-source nature of Tresor.
Speaker's personal experience with building a Tresor wallet using a Raspberry Pi Zero.
Critique of Ledger's approach to key management and the introduction of the Tresor Safe 3.
Overview of the Shamier Shard system for enhanced security in key storage.
Details on setting up Shamier Shards and the benefits of distributing shards across different locations.
Final thoughts on the speaker's passion for cryptocurrency technology and their focus on security rather than speculation.
Transcripts
well hello Internet I didn't see you
come in we're going to be talking about
some security upgrades as well as the
end of an era for myself and we're going
to be talking about these Ledger
Hardware wallets over here and what I'm
moving on from why I got into them and
why I architect things the way I do so
I've always been interested in
cryptocurrency as someone who is
interested in cyber security and
Technology I've never been one of those
we're going to go to the Moon Bros I've
just always been fascinated with the
concept of digital money and how it can
be you know secured and transferred
architected how we can protect people's
assets around it and we're going to be
talking about Ledger and we're going to
be talking about what I eventually am
transferring into with the Tresor safe 3
and how I'm using Tresor to enhance my
Security even further than Ledger but
we're going to get some backstory here
first to talk about why I got into
Ledger why what the different types of
uh you know cryptocurrency wallets are
out there and why I'm doing things the
way I am so let's start off with the
fact that I have two Ledger wallets if
you noticed and I actually use both of
these they're not a backup of the other
one they're both independent of each
other with their own seed phrases and
the way that this works is I have a hot
wallet which is my more active wallet
that I use and I have my semic cold
wallet which is the wallet that I use
for you know uh storing different
cryptocurrencies and stuff in longer
term this is maybe like what I would do
trades on or you know my more risky
things maybe some pocket money
equivalent of it and then of course
course I have my third tier on top of
that which is paper wallets which are
exclusively for long-term Holdings and
they are what they sound like they are
pieces of paper that I printed out with
a QR code and a string of characters so
that I can recover and swipe those coins
in at a later point so I've been doing
that for many years with Bitcoin and
even Litecoin back in the day and you
know Monero things like that but the
reason why I got into Ledger wallets
around 2016 2017 I've been doing
cryptocurrency for over a decade I mean
I think I started around 2010 2011 it
was worthless it was just an idea
somebody had out there and we're like
hey I can use my computer to possibly
make money and you know it wasn't like
you know money like we were thinking
like you know go to the Moon it was I
can make a couple bucks that's literally
when I say a couple bucks I mean like
we're talking a dollar or two it was
just like the the idea of digital money
was more amazing to us than the idea of
Financial Freedom which some Crypt Bros
have gotten about if you're looking for
a crypt bro video and a person that's
going to tell you buy this coin we're
going to go to the moon go somewhere
else we're talking about this from a
cyber security professional perspective
somebody who likes technology somebody
who likes to research the Technologies
and is genuinely fascinated in the tech
and how we can architect everything
around it so I even built some you know
uh Bitcoin Miners and stuff back in the
day when GPU mining was a thing but you
know we started out with software
wallets so I remember using the Bitcoin
core wallets and all of those I remember
the Dogecoin core wallet I remember we
were literally mining Dogecoin as a meme
before people actually took it seriously
like we knew we were wasting our time
Dogecoin was the idea of you would
mindless to learn about cryptocurrency
and how it works and all that it was
literally made as a meme and a joke but
I digress so we had software wallets and
we had paper wallets and the idea with
the software wallet is it's a piece of
software on your computer or phone and
the issue with that of course is that
it's on your phone or computer which you
regularly access the internet and many
other things so if you have malware or
such like that it can come in and swipe
all of your things out so that of course
is a problem so we need to talk about
how to secure all those things and
that's where the Advent of Hardware
wallets came about now of course you
have Tresor over here open source the
one issue that I had with them is that
they didn't have a secure element and
this trasor wallet just so you know this
is one I made myself with a Raspberry Pi
zero they're very open source and I 3D
printed a case so I've actually been
tinkering with Tresor for a while but
Ledger had a secure element so what that
is is it's a additional chip on here
that allows some uh anti-tamper
protection so that way if somebody gets
your device yes they you can either
Brute Force the pin but there are some
additional protections that if to
prevent it from tampering they're not
fullprof of course because once you have
physical access to any device you can do
whatever you want so there are you know
ways to modify that but it helps get a
little additional layer of protection if
you will and trasor didn't have that I
even have the trasor Model T somewhere
in my uh shelves where I was playing
with that and it had as little
protection as this Raspberry Pi zero in
that case but nonetheless Ledger had
that so originally I had The Ledger Nano
s this is the Nan S Plus uh I don't have
the Nano s here at somewhere um but the
idea was with The Ledger Nano s that I
liked with was that you could you know
just have a very simple device that
would allow with secure element on there
so that you could protect your assets
and then I could also make sure that if
I wanted to transact I had to confirm
the transaction on the hardware wallet
as well as the entire seed is generated
on the Harbor wallet it stays on the
seed with only the public view key being
exported to the device so that it can
actually view the things you still have
to press the buttons to actually confirm
transactions and such and then
eventually I got The Ledger Nano x uh uh
because well the Nano s is great but the
original one only held four or five
cryptocurrencies at a time so you would
have to swap between wallets your
cryptocurrency was tied to that seed
phrase you could uninstall the the app
running that cryptocurrency on the
wallet but then you'd have to reinstall
it if you want it was very cumbersome so
the Nano X went from allowing you to
have four or five to 127 and that was
the main reason but one reason I didn't
like that the X was it had a battery in
there as well as it allowed Bluetooth
connection I'm not a fan of Bluetooth
it's not the most secure thing in the
world it was designed as a wireless
serial equivalent that's a whole other
video that we can go into with rs23 2
and everything at another time but
nonetheless I don't like Bluetooth I
don't even like Bluetooth headphones I I
like hard wirring my things and a
battery was just another issue on a
device which this battery had issues
well the prior one had issues so I had
to buy another X because the battery
kept messing up it actually kind of like
imploded and then broke that which is
why I really like the Nano s+ less
expensive same capabilities as The
Ledger nanox no Bluetooth no battery a
lot more simple a lot more reliable but
with that being said had a secure
element and I have you know of course
three wallets we have the hot wallet
semi-old wallet and we have the paper
wallet moving on from there Tresor
finally released the trasor safe 3 and
they also have the save five now but the
save three is more than enough and they
have different colors so I got not one
but two of these guys to replace the
ledgers because the safe 3 has a secure
element in there not only that they have
additional security and they're a lot
more open source and I don't like how
Ledger has ADD this whole esro key thing
where you're trusting them more rather
than building your own infrastructure
because the honest truth of is is if
Ledger actually released the tools for
us to host our own asod Keys like many
of us want to do we want to maybe throw
up a Raspberry Pi in our own Rack or uh
a server on something else that we can
monitor and control so that if we lose
it we can restore it from our own Astro
rather than relying on another company I
wouldn't have nearly as much of a
complaint but with that being said that
was kind of the final straw for me to
look at different solutions so tror safe
3 has a lot better benefits in my mind
it's a lot more open source from end to
end open source like I said you can make
your own Hardware wallet over here like
I did with my Raspberry Pi zero whereas
The Ledger you got to buy it from Ledger
you got to make sure that you know you
um uh get it and uh you can trust them
whereas Ledger there are ways for you if
you want to make your own safe 3 to buy
the printed circuit board and remake
this entire thing I saw projects out
there for people that were selling the
pieces for me to solder on to make my
own Model T if I really wanted to go
about doing that if you want to do micro
soldering and all that be my guest I was
not a fan of that so but trasor out of
the box even like has you install the
firmware as step zero on this guy
whereas Ledger out the box is ready to
go if that's an advantage to you great
but you still got to update the firmware
anyway so you may as well come with a
blank one so you make sure your firmware
is not tampered with I also like the
fact that when I open this up that USB
connections very secure um they had not
just tape over the um screen and the
entire device but they had it around
this lip here where you can see uh it
was an anti-tamper so you could actually
see is that going to focus I don't think
think it's going to focus but there's a
little bit of residue still there so I
could tell like somebody took a sticker
off now additional enhancements that it
has are on the actual key storage itself
so of course you have the typical bip 39
12 to 24 uh word uh passphrase backup
you know write down on a piece of paper
but we're going to be building on that a
little bit so with the hot wallet we're
going to be using a typical bip 39
storage which this is the ellipal seed
phrase uh tablet I think it's called
it's a steel tablet basically so you
then uh generate your key on the trasor
same as you would The Ledger but then
you can use these little punchouts here
to store them in your little seed phrase
tablet and then what I'm going to be
doing is I have some anti-tamper
stickers here I have these with the
shiny seal that like leave a little bit
of a Mark if you get left behind but I
also have these over here that are
serialized and I can you know write my
uh signature on so I can make sure learn
tampering with and then of course put a
little lock on there now of course once
people have physical access game over
but that's where the trasor has some
advantages so over
here we have their shamier Shard kit
yeah so what is a sharir Shard so it is
the ability for you to create a key and
split it into different shards so as the
bip 39 it's all in one place all your 24
words take it game game over man they
once they have this it's game over
that's it that all they need to do is
get access to your one seed phrase so
what is The shamier Shard so basically
you have to at least have two of three
or up to you can do a 16 shards if you
want and there's these different you
know shards we're going to open this up
over here as you can see I haven't
opened these at all so each one of these
is a Shard that's going to have 20 words
on it me open this up so I can show you
and uh this is going to be my first time
actually seeing them myself the concept
of A shamier Shard is something we know
of in cyber security and it's a really
cool concept but the idea is we have
three of these shards over here I can
got to rip that
open you're going to have three of these
shards over here there's this little
stylus over here that we're going to
punch out to know what the words
are and you have this little caps
so there's three of these you can do
more if you want but the idea is each
one is going to have 20 words on
it so you can do up the 20 and there's
three different ones with 20 words each
so you have 60 words versus 24 words not
only that you need at least two of the
three shards if you set up a two of
three unless you do a 15 of 16 again to
restore everything so what you can do in
addition is you you now can take these
three shards put them in three separate
physical locations so let's say if you
do happen to keep one Shard at your
house and somebody happens to steal it
from you they still need one of the
other two so you then can go find the
other two shards restore your wallet or
whatever and then Rey it to a whole new
one so this is some nice security and
that is one of the nice upgrades cuz
Ledger doesn't do A sherier Shard so
yeah really looking forward to tinkering
with this a little bit more I obviously
haven't set up my Shamir Shard yet I'm
going to have some more updates on that
as we go but like I said I tinker with
cryptocurrency because I genuinely enjoy
the concept of it and the ideas around
it and I'm not you know going to the
Moon with everybody you go look through
any of my Tik Tok or other content
you're not going to find me speculating
on price you're going to find me talking
about the tech around the cryptocurrency
and why I like things
but with that being said I love all of
you happy hacking and I hope you learned
a few things along the way
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