Ledger Wallet Explained: What It Is & How To Use It

Key Takeaways

• Ledger’s Nano wallets have been keeping crypto safe and affordable since 2016.
• They work smoothly with popular software wallets, so you get flexibility without the fuss.
• If you’re after something a bit more premium, the Ledger Stax and Flex bring extra features and a sleek, stylish design.
• No matter which model you choose, your private keys always stay offline—even when you’re connected to the internet.

What Is Ledger?

LLedger is a leading maker of crypto hardware wallets with over a decade of innovation in the space.

4 Different Models

Ledger offers four pocket-sized wallets, each tailored to different needs.

1. The Nano S Plus is the affordable option with essential features.
2. The Nano X adds Bluetooth support and a built-in rechargeable battery, making it great for mobile use.
3. The Flex steps up with a sleek E Ink® touchscreen for easy navigation and enhanced functionality.
4. The Stax is the premium choice, featuring a curved E Ink® display, wireless charging, and customization with your favorite pictures or NFTs.

All models keep your private keys secure, so you can choose the one that fits your lifestyle best.

You’ll need to connect the Nano S Plus — or its older and soon end-of-life sibling, the Nano S — to a computer, while the Nano X, Flex, and Stax can communicate via Bluetooth or by USB C.

Cold Storage

Crypto wallets use two sets of keys: a public key can act as a receiving or watching address, but a private key is a key to your crypto kingdom.

The benefit of using a Ledger hardware wallet is that the wallet can keep your private key hidden — even from devices that connect to the internet. This is called cold storage.

By comparison, software wallets and wallet apps are hot wallets as they store your private keys in a way that’s exposed to the internet.

In effect, your Ledger hardware wallet acts as a gatekeeper for outgoing transactions, only allowing transactions that you authorize on your Ledger device.

Ledger Steel Wallets

To complement Ledger’s electronic hardware wallets, Ledger also offers the Cryptosteel Capsule, the Billfodl, and the Cryptotag Zeus.

All three are nearly-indestructible steel devices that hold your 24-word recovery phrase, protecting it from disasters that would destroy paper backups, such as fires or water risks.

If your Ledger is lost or becomes damaged, this 24-word seed assigned when you set up your wallet lets you recover your crypto.

Ledger CL Card Debit Card (Powered By Baanx)

The Ledger CL Card, in partnership with Baanx, lets you spend crypto at over 90 million merchants or use it as collateral for credit.

It comes with features like instant fiat conversion, secure transfers with Ledger Live, and up to 2% cashback in crypto. It’s currently available for UK and EEA customers only.

How Does Ledger Work?

Ledger’s hardware wallets work in conjunction with a multi-purpose app called Ledger Live.

With Ledger Live, you can update your Ledger, install apps to support more cryptocurrencies, and even buy and sell crypto through in-app providers.

You can install Ledger Live on Android or iOS, as well as on Windows, Mac, and Linux computers.

Pairing with Software Wallets

Ledger wallets can also pair with well-known wallets, such as MetaMask, Coinbase Wallet, and Phantom.

This structure locks down your crypto on connected wallets, requiring ‘permission’ from your Ledger before any crypto leaves your wallet. In a sense, Ledger hardware wallets work like two-factor authentication that requires a response on a device you physically hold.

Inside a Ledger Wallet

Under the hood, Ledger wallets run a custom operating system called Blockchain Open Ledger Operating System (BOLOS), which isolates each crypto app from the others.

This is paired with specialized hardware to keep your crypto safe.

Ledgers utilize Secure Element Chips, a tamper-resistant chip used to host apps and store keys. This choice offers more robust security compared to microcontroller units (MCUs) that some hardware wallets use.

Ledger Key Features

While the hardware specs between each Ledger wallet may vary, there are some core features that apply to each of their devices:

• Multicurrency Wallet:Ledgers can store up to 5,500 types of coins or tokens. However, the device itself can hold up to 100 installed apps, with each app bringing support for another type of crypto.
• Offline Keys: Your private keys never leave your Ledger wallet, even when you connect to a computer or mobile device. However, if someone gains access to your 24-word recovery phrase, they can also access your crypto.
• EAL 6+ Certification:Ledgers boast an Evaluation Assurance Level (EAL) of 6, which is a measurement of internationally recognized Common Criteria security testing.
• Support For Staking: Stake crypto, including Polkadot, Tezos, Tron, Cosmos, Algorand, or Solana through Ledger Live, and keep control of your private keys. Ledger also supports liquid staking for Ethereum through Lido.

Ledger Pros And Cons

Ledger Pros

Ledger has some tough competition now, including Trezor and Keepkey, but its iconic and time-tested Nano lineup still brings its best game.

On paper, technical specs for all Ledger models are similar. On the other hand, the Nano models are more basic and cost-effective, while the Flex and Stax have more enhanced designs—which also come with a higher price tag.

• Bluetooth And Battery Powered (Nano X, Flex, & Stax):Forget messy cables—Ledger's Nano X, Flex, and Stax wallets have rechargeable batteries and use Bluetooth for secure, encrypted pairing with your smartphone. For desktops or Android devices, you’ll need a USB-C or OTG cable.
• Support For Thousands Of Coins Or Tokens:Ledger wallets support up to 5,500 cryptocurrencies, but storage limits mean you can install about 100 apps at a time. Each app handles different blockchains or tokens, so chances are your next favorite crypto is covered.
• Offline Cold Storage:Hot wallets like MetaMask and Coinbase Wallet are great for exploring Web3, the metaverse, and DeFi, but their always-online nature can be risky. Pair them with a Ledger hardware wallet to keep your private keys offline and your crypto secure, without sacrificing convenience.

Ledger Cons

For some, Ledger’s hardware wallets may not fit the bill. Among the potential drawbacks are limited app space and a battery that can’t be replaced.

• Limited App Space:Ledger claims support for 5,500 cryptocurrencies, but in reality, you can install up to 100 apps at a time. Thankfully, the Ledger Live dashboard makes it easy to manage storage, letting you add or remove apps as needed.
• Non-replaceable Battery:When the battery goes on any of Ledger’s wallets, you’ll likely need to replace the entire device. The battery can’t be replaced—at least not easily.

How To Set Up Your Ledger

Ledgers work in conjunction with the Ledger Live app. Download the app using the official download links from Ledger.

Step 1: Set Up Your Ledger As A New Device.

Turn on your Ledger wallet by connecting the USB cable, following the initial instructions on the Nano’s screen. This basic walkthrough gets you familiar with the device controls.

Setting up Ledger as a new device screen

You’ll also choose a PIN code of 4 to 8 digits.

Choosing a pin code for Ledger screen

Step 2: Write Down Your Recovery Phrase.

Your Ledger wallet will generate a 24-word recovery phrase. This phrase links to the private keys for your Ledger wallet, so never share it with anyone. Write down your recovery phrase and keep it someplace safe.

Receiving your recovery phrase on Ledger

Ledger provides a few fill-in-the-blank recovery sheets in the Ledger’s package.

Setting up and hiding your recovery phrase on Ledger

Prepare for a short quiz in the app. Don’t worry. It’s easy and helps ensure you know how your Ledger works.

Step 3: Connect Your Ledger Wallet And Install Your Apps.

As the last step, Ledger Live checks to be sure your Ledger wallet is genuine.

Connecting your Ledger and installing your apps

After this quick check, you’re ready to install some apps using Ledger Live.

You can store up to 100 apps on your Ledger wallet, but it might be best to start with a few apps to get acquainted with the process. A similar installation process applies to the Stax wallet.

If you need to connect your Ledger to your Rabby Wallet, Phantom Wallet, MetaMask Wallet, or Coinbase wallet, Ledger provides easy-to-follow instructions.

What Is Ledger Recover?

Ledger Recover is a paid service that lets you recover the seed phrase for your Ledger wallet. A lost recovery phrase means you also lose access to the crypto in the wallet, which can be a costly mishap.

With countless stories about recovery phrase cards going through the wash in a jeans pocket or Fido eating the recovery phrase card that fell off the desk, Ledger Recover is designed to prove peace of mind.

The service is a ~$10 monthly subscription offered through Ledger and Coincover.

Here’s How Ledger Recover Works:

Ledger Recover availability depends on the country or region where your ID document is issued. It’s currently compatible with all Ledger devices, through the Ledger Live app.

Setting it up

1. You sign up for the service through Ledger Recover (available on iOS or Android versions of Ledger Live)
2. Submit your ID (passport or national ID card) and a selfie video to Ledger.
3. Pay $9.99 per month for the service.
4. Your ledger private key is split into three parts on your device, and each of the three parts is encrypted.
5. The three encrypted files are sent to three different companies, Ledger, Coincover, and EscrowTech, with each company only having one of the three encrypted files.

Recovering your keys

If you lose your recovery phase and need to restore your device, you can restore the private keys through Ledger Recover:

1. Submit your proof of ID.
2. Two of the three companies will send encrypted files back to your Ledger device.
3. Your Ledger uses the encrypted files to rebuild your private keys.

Note:Ledger Recover does not restore or give you access to your recovery phrase, just the private keys for your device.

The idea is similar to Shamir’s Secret Sharing, an encrypted split-file privacy technique dating back to the 70s, but given a modern twist — and a monthly subscription fee.

Ledger Recover is completely optional, and without the service, your Ledger works the way it always has, leaving you responsible for safeguarding your recovery phrase.

Is it worth ~$9.99 per month? That’s up to you. Some people with large balances might think so.

Is it controversial? Yes. Following a turbulent rollout of the service, Ledger addressed initial community concerns by moving to open-source parts of its firmware. This included that of Ledger Recover, to boost transparency and security.

Final Thoughts On Ledger

Free-to-use software wallets and wallet apps have their appeal. But as hot wallets, they can also introduce risk to your crypto holdings.

Ledger’s time-tested hardware wallets provide affordable security that also integrates with many of today’s most popular online wallets. This two-step approach lets you explore the more innovative parts of the crypto-sphere while reducing the risk to your hard-won coins and tokens.

Ledger offers a range of hardware wallets at different price points, from the affordable Nano S Plus, to the feature-packed Stax hardware wallet.

With Ledger, there’s a cold-storage solution for all levels of crypto investors.