Ledger NanoS bitcoin and ether hardware wallet: first impression

A very exciting event this week: the new Ledger NanoS Wallet has arrived! For most people, this device looks like a flash memory stick but in reality it could be a very important product, when and if cryptocurrencies become mainstream.

Purpose

What is the Ledger NanoS wallet for? It offers several layers of protection for bitcoin/ether holders against accidental loss of access to funds, and against malicious theft of funds by a hacker. 

More technically, Ledger Wallet is a device that performs Public Key Encryption internally and stores the private key securely. This is a big deal, since in the digital currency space, losing the private key means losing access to the funds forever; and disclosing the private key means opening the door to a thief to take the money.

Ledger Wallet performs the private key signature operation inside the hardware. So, assuming its firmware is well written and the access protocol via the USB connection is secure, it offers a great way to protect the digital identity, for bitcoin and ether users.

What if I lose the Ledger Wallet? Anybody who found the key will have to guess the PIN in 3 attempts. After that, Ledger Wallet erases itself to the factory settings and becomes useless.

A recovery passphrase provided by the device can be stored in the bank deposit box. This passphrase can be used to configure a replacement hardware ledger wallet with the original key.

Ease of use

All you need to set up NanoS is to connect to a source of USB power, enter the PIN, read and copy the passphrase, and install the wallet client in the Chrome browser. Mobile clients are also supported, but I have not tried it out.

The wallet operation is straightforward. There is nothing to do to receive money, just provide the address to the sender. To send money, the Chrome wallet sends the transaction to the hardware unit. The unit's screen flashes the recipient address and the bitcoin amount, and allows to confirm the transaction or cancel. Therefore, even if my computer is hacked, nobody can send the money out without an explicit confirmation.

Test

The first attempt to send Bitcoin failed - the Chrome wallet returned "cannot validate the transaction". However, at the 3rd attempt the validation worked. USB problem? Software issue? We could not determine the source of the error.

Conclusion

Ledger Wallet NanoS is a pioneering product, extremely easy to use for a developer or an early adopter, with a possibility to become a mass product in the near future. Strongly recommended for anybody with considerable investments in bitcoin or ether.

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