Ledger -Is It Compromised?

The Ledger is under fire. Should you dump your Ledger?

What is a Ledger?

Typically, if you are looking to protect your crypto, the only real option is buying a hardware wallet.

This way, you can retain custody of your assets and keep your private keys safe and offline.

Ledger devices are some of the most secure Crypto wallets in existence, securing your private keys with a Secure Element Chip.

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What is a Hardware Wallet?

A hardware wallet is a cryptocurrency wallet that stores your private keys. Further, the main principle behind hardware wallets is to provide full isolation between the private keys and your easy-to-hack computer or smartphone.

Why it is under Fire?

Ledger is under fire for a new account recovery that introduces a backdoor into its hardware wallets.

In addition “Recover” feature allows you to back up your private keys so you can recover them if lost.

Additionally, recovery splits your private keys into 3 encrypted fragments to be stored by 3 different companies including Ledger.

Simply, you once trusted that it was impossible for your private keys to ever leave your Ledger device, Understandably, this is the whole point of a hardware wallet.

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‘Backdoor’ in Ledger? Here’s What’s Going On—And How to Keep Your Crypto Safe

The main source of ire from the crypto community towards Ledger was due to the Tuesday introduction of Ledger Recover.

Mainly, an opt-in ID-based private key recovery service allows users to back up their seed phrases to their personal identity via three different custodians.

Why did Ledger do this?

The new feature is designed to make it easy for anyone to own crypto, getting rid of the confusing stuff related to private keys.

What are the Disadvantages of Ledger Wallet?

Despite the variety of supported crypto assets, the main Ledger Nano has the drawback of having limited Internal memory. It lets you install only up to 3-5 different cryptocurrency wallets depending on the size of the wallet.

Now, Ledger has a lot of questions to answer.

a.Who has access to users’ wallets with Recover?

b.Could bad actors gain access to your private keys?

c. Could a government force Ledger to hand over private keys?

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Conclusion

Ledger has a lot of work to do to regain Customer trust.

For now, do not perform any firmware updates. Diversify your wallets. I recommend checking out Argent and Trezor.

Whether Ledger Recover will prove to be the company’s biggest flop or best move at grabbing market share among those not comfortable with personal private-key management is anyone’s guess—but its rivals are banking on a flop.

After yesterday’s controversial update, competitors are capitalizing on Ledger’s terrible, horrible, no-good-very-bad day by attempting to court its disillusioned customers with discounted prices on their offerings.

In a stroke of rapid strategic marketing, four of Ledger’s main rivals were quick to respond to the community’s pushback to the update, and slashed prices on their products.

Blockstream is offering a 10% discount on its flagship wallet Jade, Trezor is offering a 15% discount, Cold Card is showcasing a 15% discount, and BitBox has marked down their wallets by 10%.

The companies have also been touting their open-source code and refusal to entertain any compromise of self-custody.

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FAQs

How do Crypto Wallets work?

When you buy crypto like Bitcoin and Ethereum, you are issued with 2 keys, the public and private keys. The public key can be compared to a bank account number that you can share with third parties to receive crypto without worrying that your assets will be compromised.

Additionally, the private key transactions allow you to send and receive crypto. It’s crucial to keep your private keys secure and secret.

What are the different types of Crypto Wallets?

There are different types of crypto wallets each with its benefits and drawbacks. Hot Wallets are connected to the internet and are usually convenient to use.

However, they are also vulnerable to online attacks. Examples include web-based, mobile, and desktop wallets.

How Crypto Wallets can be Categorised?

Crypto wallets can be categorized into 2 types. Custodial or Non-custodial. Depending on who holds the private keys.

Storing your crypto in a custodial wallet means that a third party controls your private keys and, therefore, your assets. In contrast, a non-custodial wallet allows you to fully own and control your crypto.

Why do You need a Hardware Wallet?

Chiefly, Hot wallets store private keys on systems connected to the internet, which makes them susceptible to online attacks.

Further, keeping your crypto on exchange files for bankruptcy or pauses withdrawals, you lose access to your funds.

Additionally, hardware wallets store your private keys offline, giving you full control and enhanced security.

Even if you misplace or lose your hardware wallet, you can get a new one and use your Secret Recovery Pharase to access your assets.

Is it safe to use Ledger on Mobile?

Firstly, every Ledger device offers you a completely secure, offline environment for securing your most sensitive information.

Secondly, with a Trusted Screen on every device, you will also be able to receive key data. Such as transaction details and your recovery phrase, in complete security.