Paper, Software, or Hardware: Why Trezor Beats Ledger for Cryptocurrency Security

Summary

In 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

00:00

🔒 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.

05:00

🔄 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.

10:01

🔧 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.

Keywords

💡Ledger Hardware Wallets

Ledger hardware wallets are devices used to securely store and manage cryptocurrencies. In the video, the speaker discusses his use of Ledger wallets, highlighting their secure elements and their role in protecting digital assets from malware and online threats.

💡Cryptocurrency

Cryptocurrency refers to digital or virtual money that uses cryptography for security. The speaker has a long-standing interest in cryptocurrency due to its fascinating concept and the challenges of securing and transferring digital money. Examples mentioned include Bitcoin, Litecoin, and Monero.

💡Seed Phrase

A seed phrase is a set of words generated by a cryptocurrency wallet that allows access to the wallet’s funds. The speaker mentions using seed phrases for both of his Ledger wallets and explains their importance in securing access to his assets.

💡Tresor Safe 3

Tresor Safe 3 is a hardware wallet known for its open-source nature and enhanced security features, including a secure element. The speaker prefers Tresor over Ledger due to its transparency and the ability to self-host key recovery services, which enhances trust and control over his digital assets.

💡Hot Wallet

A hot wallet is a cryptocurrency wallet that is connected to the internet, making it convenient for regular transactions. The speaker uses a Ledger wallet as his hot wallet for more active use and immediate access to funds.

💡Cold Wallet

A cold wallet is a type of cryptocurrency wallet that is kept offline to provide enhanced security for long-term storage of assets. The speaker uses a second Ledger wallet as his semi-cold wallet for less frequent trades and more secure holdings.

💡Paper Wallet

A paper wallet is a physical document that contains a cryptocurrency address and private key, typically in the form of a QR code. The speaker uses paper wallets for his long-term holdings, emphasizing their security for offline storage.

💡Shamir Shard

Shamir Shard is a method of splitting a cryptocurrency seed phrase into multiple parts (shards) for enhanced security. The speaker discusses Tresor's use of Shamir Sharding, which requires multiple shards to restore the wallet, thus increasing security by distributing the seed phrase across different locations.

💡Secure Element

A secure element is a tamper-resistant hardware component designed to securely store cryptographic keys. The speaker prefers hardware wallets like Ledger and Tresor Safe 3 that include secure elements for added protection against physical tampering and unauthorized access.

💡Open Source

Open source refers to software or hardware whose design is publicly accessible, allowing anyone to inspect, modify, and enhance it. The speaker values Tresor's open-source approach, which contrasts with Ledger's more proprietary model, as it provides greater transparency and control over his cryptocurrency security.

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