Ledger Nano X — For Dummies.
First off, please don’t take this wrong, with Ledgers — I am a dummy too. This is my first Ledger wallet, and I want to use this as an opportunity to document my journey in hopes of making it easier for those wanting to take full ownership of their digital assets. With the collapse of FTX — Cryptocurrency Derivatives Exchange, and with an array of many other centralized exchanges, what better time than now to take a few minutes to understand the value of self custody.
“Not Your Keys — Not Your Crypto”
Understanding the difference between: a Ledger (cold storage), native hot wallets and Centralized Exchanges (or CEXs) is step one, so lets get started and keep it as simple as possible.
- 1) Centralized Exchanges — When you purchase crypto like Bitcoin or ethereum from a centralized exchange, that exchange owns the crypto on your behalf.
- 1a) Context-Analogy (Intermediate) — A great example of this would be the Coinbase exchange vs their non custodial browser wallet or mobile app. The exchange app requires a KYC connection to bank or credit union (PayPal included) which can be the generic on or off-ramp to crypto; as well as sell it into your native dollar — and back to your bank account.
With this method, you gain usage of wallets in their custody, and until you as a user understand how to safely hold your own mnemonic seed phrase and private keys, you are unfortunately subject to loss of assets at random like what happened with Celcius, Three Arrows Capital, Voyager, FTX and other institutions that have not fully embraced decentralized core values.
Examples of popular centralized exchanges would include:
- Kraken
- Gate.io/Gate.us
- Binance/Binance.US
- Gemini, Crypto.com, Bittrex, Block-Fi, Voyager and a number of other centralized exchanges are extremally risky due to the unforeseen layers of risk exposure to the FTX — Cryptocurrency Derivatives Exchange collapse. KuCoin, Okex and Bitmart are also a bit risky if you are a US resident, but have a larger selection of tokens.
Summary Of Centralized Exchanges— When you purchase crypto off centralized exchanges, the crypto stays in a wallet held by that exchange with no guarantee of return if stability collapses. The best thing anyone can do once they have purchased assets is migrate them into their own custody — whether hot wallet or cold storage.
2) Native Software Wallets (Hot Wallet) — First off, not all blockchains are compatible, in fact most are not. Regardless of the high concentration of DeFi and NFTs projects focused on Solana and ethereum, there are other chains like Binance, Cardano Foundation, Tezos, Elrond Network, and DFINITY that are also launching NFTs and DeFi protocols — yet require separate wallets for each chain. The plus side to ETH and SOL is the higher concentration of NFT users, pushing for better UI/UX to their platforms.
COMPLEX — NOTE: Hardware and Software wallets are Private Key-Specific — meaning you can have additional blockchain-wallets attached to different browsers, from the same blockchain; with different seed-phrases, on the same computer. It is recommended to keep your browser of choice updated, and ensure to pick a wallet compatible with your chain of preference. Coinbase (Self Custody), Exodus and Trust wallet are the three with the most diverse range of tokens and would suggest starting with one of those three unless, unless you are chain-specific for an NFT project.
2a) More On Seed Phrases, Private Keys & Two Factor Authentication — This is the part where most give up, yet it is not much more intimidating than creating a better version of a password. The difference between the latter is you can not change the seed phrase or private key, as it is comparable to an account or routing number. This is private information you do not want anyone to have access too, and your mnemonic code will be attached to your individual wallet’s private key, which needs to be hidden offline.
Upon initial setup — every self custody wallet will make you
a) Write down your phrase, and
b) Enter it correctly before giving full access to the wallet interface.
2b) Key Notes About Seed Phrases
- Keep then written in a private notebook, or offline in a fire-proof safe if possible. You can also use a BillFodl comes in a package shown below.
- Never store a seed phrase as a file on your computer, Google Drive, or other cloud storage. If there is a compromise to your device, like trojan or malware, it will search for the private keys and files. If this information is left on your computer, you are susceptible getting your assets stolen if data storage is compromised.
- Never take pictures of your seed on your phone. Phones are another source of constant hacks. Again — NEVER keep your seed phrase in a digital device or storage file.
- Never enter your seed phrase into a website, or give it to a representative claiming to be support. There are compromised phishing sites that trick you into thinking the site is official, yet with deceptive URLs — using an “l” for a capital I is a common one. They will usually prompt an immediate connection to a wallet, and if tricked the entire funds of the users wallet will be signed over to the scammer resulting in a loss of wallet ownership via malicious smart contract.
I have been phished in early days. You can read about it on The Piggy Bank medium page here.
2c) More On Passwords & Two-Factor Authenticator — This is that added security layer that helps ensure your assets are safer than safe.
As quoted by CEXs Kraken:
An authenticator app is usually installed on a smartphone and generates a 6–8 digit code every 30 seconds. The code can be used for signing in, trading, depositing or withdrawing funds from your account or as a Master Key.
Setting up two factor authentication will help ensure that even if a local device is compromised, the hacker can not steal funds without access to the authenticator passwords on the 2nd device, rotating every 30 seconds. I personally use the Google Authenticator app and have had no issues, but will provide a video with alternative recommendations for those who additional security that Google Authenticator App does not provide.
3) Cold Storage — Is undoubtedly the most secure form of digital asset storage, but requires the understanding of hot wallets, as well as a learning curve to use the device (like this article).
Prior to the altcoin boom, there was simple Trezor Model 1. This was great for the beginner to hardware wallets if you hold BTC/ETH and had little to no exposure to alt-coins or layer-two protocols. A list of Trezor compatible coins can be found here. A few dilemmas to arise with the Trezor were: 1) A more complicated UX, 2) A lack of supported tokens and upcoming protocols and 3) No application to help create a more seamless user experience.
Ledger > Trezor? You Decide.
Apple to Apples — both are great products, and both leaders in the industry when it comes to hardware wallets. Both have differences, and Investopedia gave a great breakdown of the two here:
My personal reasons for choosing Ledger Nano X over the Trezor T:
- 1) The specific protocols I supported were not compatible on either Trezor, such as Uniswap ($UNI), Yearn Finance ($YFI), The Graph ($GRT), and Avalanche ($AVAX) to name a few.
- 2) As a person who has gone through many smart phones due to cracked LCD screens, my fear is the long term sustainability of the Trezor touchscreen, as opposed to Ledgers App connectivity which provides a complimenting interface to use with the Ledger.
- 3) Regarding NFTs, there was added wallet compatibility from chains like Solana for the Phantom and Solflare Wallets. This added application support allowed for holder verification within NFT communities to be authorized via zero knowledge proof transactions — therefore enabling NFT holders to stay connected to their communities, without the added risk exposure of leaving the assets on a software wallet.
Key Notes To Add — While the Ledger boasts a number of great feature, I think it is important to add that the firmware for this product is not open source. Trezor products are created by SatoshiLabs and is the original hardware wallet for Bitcoin.
So are you ready to get your assets off a centralized exchange and fully into your possession? Watch this 90 second video I made below of how to use Coinbase Pay to instant-transfer your funds in your wallet in seconds!
Get Started Dummy I Don’t Have All Day
So you have your Ledger S, X or Blue, and the box is open. Visit the official Ledger website, and download Ledger-Live here.
Upon set up, the program will ask if this is your first time, or you are “already have a recovery passphrase”. As we learned above, a mnemonic recovery phrase (aka seed phrase) is a 12 or 24 word password that is tied to the private key of a blockchain account.
Assuming this is your first time:
- Select first time and agree to terms of services after reviewing. Make sure to set up a passcode to your ledger that you will memorize as you will have to enter that passcode on the connected device in order to process each transaction.
**IMPORTANT **— The program will then provide you the 24 word seed phrase attached to your Ledger Device. Make sure no one is around and write down your recovery phrase on paper, or use a BillFodl for added security.
If you are confused about this step, scroll up and re-read: Seed Phrase, Private Keys and Two Factor Authentication.
- The program will also remind you to hide your recovery phrase. Once confirmed you will reach a pop quiz asking you
- 1) — If your crypto is stored on your nano or on the blockchain, and
- 2) — What happens if your seed phrase is compromised?
It is essential for users to understanding this concept of self custody and how new users NEED to acknowledge they now hold the keys to their crypto (offline)--stored on the blockchain.
Scan Device For Malware
- Connect the Nano and Ledger Live will verify the device has or hasn’t been tampered. Unlock your Nano using your newly created passcode and connect it to Ledger Live first updating your firmware. Since there is a necessity for security, it is import to make sure you update the firmware before doing anything as you might lose programs in the update.
Optional-Download the Ledger-Live Mobile App and sync with desktop app to add Bluetooth functionality and additional features.
The Nitty Gritty Details — NFTs
As someone that has found differences to each blockchain, I will breakdown the next part of connections and transactions for two blockchains with large NFT communities. Since sending Bitcoin, XRP Cryptocurrency and other currencies are more straight forward, and don’t protocols with identification bots to verify members of Decentralized Autonomous Organizations (DAOs). For this reason we will be starting with ethereum and Solana.
— Ethereum —
Starting with the most popular $ETH software wallet MetaMask.
How To: Ledger Nano X — Metamask
How To: Ledger Nano X— Opensea
How To: Link Collabland Discord — MetaMask
This is tricky as there are a few additional moving pieces. As shown in my video below, there are additional steps needed to take when selecting the proper wallet to connect with collab land. I am connecting the ledger first, to give some time ahead of when I send my NFTs to my Ledger. That way I will still maintain the necessary roles within my NFT communities without the risk exposure of hot wallets!
Part 1 — CollabLand
Part 2 — Send NFTs
Sending the NFT’s will cost some gas, and while it may seem like the NFTs don’t move within your Meta Mask, they show up in Ledger Live under the newly created account.
**Remember — While you will be able to select and use your newly attached ledger wallet minimally, you will still need your physical device to sign approval transactions.
— Solana —
Just like with Ethereum above, we will start with Solana’s most popular wallet Phantom, as I would argue it is the most comparable to Meta Mask with a close to flawless mobile app and desktop wallet.
Part 1 — Matrica
Part 2 — Send Bulk
Using Foxy Send costs 0.002 per send, but is extremely reliable.
**IMPORTANT — For Solana NFTs, you will need to view them via Matrica Labs or NFTeyez.global, since Ledger does not have a preview for them in Ledger-Live yet. Do not be alarmed they do not show up yet in the app, the tokens are still fully functional SPLs and can be used with most projects utility sites via a hardware wallet toggle button.
— Other Chains —
Like specified, most other chains will require you to
- Add the specific account via + account (for new token wallets)
- Unlock the hardware wallet, and enter password to approve installation of necessary wallet software for each chain’s assets you want to store on the ledger.
