When dealing with cryptocurrencies, securing your assets is crucial to avoid falling victim to cyber-attacks and losing your money. Many crypto exchange platforms offer storage services, making it convenient to keep your assets in your exchange account for day-to-day trading. However, cryptocurrencies stored online are prime targets for hackers, especially if the exchange doesn’t use the latest security measures.
This is why it’s highly recommended to keep all your crypto coins and tokens in specialized apps called crypto wallets designed to keep your digital currencies safe. There are many reliable crypto wallets on the market, such as MyEtherWallet, MetaMask, Exodus, Trust Wallet, and Atomic Wallet. Although these are all software wallets with robust security infrastructure, it’s best to combine a good software wallet with a strong hardware wallet to store your private keys offline if you have a large amount of crypto.
In this guide, we’ll take a detailed look at one of the best hardware wallets for storing large amounts of ERC20 tokens – Ledger Nano S. We’ll show you how to integrate it with a software wallet and provide a step-by-step guide on how to transfer tokens.
Ethereum and ERC20 Tokens
Before we dive into Ledger Nano S, let’s explain why we are talking about ERC20 tokens. The Ethereum (ETH) blockchain is one of the largest crypto blockchains, and apart from hosting the second most popular cryptocurrency, it also allows developers to build their own tokens on top of Ethereum. The Solidity programming language and other open-source Ethereum-based developer tools make it easy to launch a cryptocurrency using the ETH blockchain’s infrastructure.
These cryptocurrencies are referred to as Ethereum tokens. Unlike crypto coins, which have their own blockchain, tokens are built on top of an existing blockchain. ERC20 is the most popular token standard on the Ethereum blockchain, consisting of rules for creating cryptocurrency on the ETH blockchain. Developers have launched hundreds of these tokens, and some of the most popular cryptocurrencies are ERC20 tokens.
Popular ERC20 tokens include Chainlink (LINK), Basic Attention Token (BAT), OmiseGO (OMG), Shiba Inu (SHIB), TenX (PAY), USD Coin (USDC), Hex (HEX), Dai (DAI), Uniswap (UNI), BitTorrent (BTT), and many others.
The Ledger Nano S
The Ledger Nano S is one of the most popular hardware wallets on the crypto market. It’s a small, elegant USB device specialized in keeping your digital currencies safe. Ledger, the company behind the wallet, is a veteran blockchain security company with over 1.5 million hardware wallets sold worldwide. The company is known for its frequent firmware updates and dedicated support team available 24/7.
The wallet has a few buttons and a small screen for managing and approving transactions. To manage your Ledger device, you need to install the Ledger Live app on your desktop or mobile device. The app is compatible with Windows, Linux, macOS, Android, and iOS operating systems. You can manage your cryptos, facilitate transactions, and connect your hardware wallet to a third-party software wallet through the app. This connection allows for faster access to your cryptos, which is important for active traders.
Ledger devices store all your private keys offline at all times. When you connect your Ledger wallet to a third-party software wallet or manage your cryptos through Ledger Live, the wallet’s firmware creates a barrier between the internet connection and your private keys. This way, your private keys remain safely offline, even when your device is connected to the web.
You need to download the appropriate app within the Ledger Live interface for each cryptocurrency you wish to store on Ledger. The Ledger Nano S supports more than 1,000 crypto coins and tokens, including Bitcoin (BTC), Ethereum Classic (ETC), Litecoin (LTC), Cardano (ADA), Ripple (XRP), Ethereum (ETH), and all ERC20 tokens. The Ledger Nano X model supports even more assets.
Ledger Nano S Features
Ledger devices are CC EAL5+ Secure Element rated, certified by ANSSI, the French cybersecurity agency. This certification means that Ledger wallets offer some of the safest crypto storage in the industry, thanks to their embedded security chip, which includes efficient countermeasures against numerous types of cyber-attacks.
Several security layers protect the private keys from unauthorized access. The first time you turn on your Ledger device, you’ll need to set up a PIN code with 4 to 8 digits. Without the PIN code, you can’t confirm transactions.
All your private keys can be backed up with a BIP39 standard recovery phrase, consisting of 24 words. Store these 24 words safely, on a piece of paper or another USB device, because if your Ledger wallet gets stolen or lost, the recovery phrase is the only way to get your private keys back.
Passphrase protection is another layer of Ledger security. The passphrase adds a secret, 25th word to your 24-word recovery phrase. This means that even if someone finds your recovery phrase, they can’t steal your coins without the 25th word. If you implement this protection, don’t store the 25th word together with the recovery phrase.
When you receive your Ledger device, ensure it hasn’t been tampered with by any third party. This can be done through the Ledger Root of trust protocol, activated through the Ledger Live app once you connect the wallet. The protocol will check with Ledger central servers to ensure your device is an original Ledger wallet.
MyEtherWallet Integration
MyEtherWallet.com (MEW) is a popular Ethereum blockchain crypto wallet developed to support all Ether-based assets, allowing you to keep all your ERC20 tokens in your MEW wallet. You can use MEW from your Chrome browser, and it’s also available as a mobile app for Android and iOS smartphones.
MEW is more than just a wallet; it’s an app for interacting with the Ethereum blockchain, allowing users to exchange various ERC20 tokens without the need for an exchange like Binance. Smart contract capabilities are also available through MEW, enabling you to set up contracts to buy specific tokens at certain prices. These features aren’t usually available on regular crypto wallets.
MEW relies on the Ethereum blockchain’s security, meaning transactions are immutable and cannot be reversed or altered once initiated. All your private keys are stored on the device running MEW, which is generally safe. However, if your device gets hacked, a cyber attacker could steal your private keys. For this reason, MEW developers have included hardware wallet support, allowing you to integrate your MEW account with Ledger Nano S to store Ethereum-based assets safely offline.
If you store small or moderate amounts of ERC20 tokens, using MEW as your main wallet is fine. However, for storing a large number of tokens or long-term storage, integrating MEW with Ledger Nano S is better. MEW doesn’t have multiple protection layers like two-factor authentication (2FA) or email confirmation for transactions, so connecting it to a hardware device adds security.
Transferring ERC20 Tokens to Ledger Nano S
If you decide to use MEW as a third-party Ethereum wallet paired with a Ledger Nano S device, transferring ERC20 tokens to Ledger is straightforward once you set up your MEW-Ledger connection and learn how to manage your tokens.
Here’s a step-by-step tutorial:
- Update Ledger Live: Ensure your Ledger Live app is updated to the latest version. Connect your Ledger Nano S to your computer and install the Ledger Ethereum app. This app is essential for storing any ERC20 token on the device.
- Add an Ethereum Account: After installing the app, add an Ethereum account to your Ledger Nano S device. Go to the Accounts section, select Add Account, choose Ethereum (ETH), and proceed.
- Run the ETH App: Unlock your wallet and run the ETH app. Choose between existing Ethereum accounts, adding a new one, or selecting an Ethereum account already in your portfolio. Add an existing or new account and click Continue. This enables you to store Ethereum and ERC20 tokens on your Ledger Nano S device.
- Connect MEW and Ledger: Connect your Ledger wallet to your computer and go to Settings. Navigate to the Contract Data feature and select Yes.
- Access MEW Wallet: Switch to your MEW app, go to the Access My Wallet section, and select Hardware. Choose Ledger wallet and select Connect With Your Device. A pop-up window will appear to choose a derivation path and network. Select the ETH network and the ETH derivation path. Choose a wallet address from the list.
- Send Tokens: On the next screen, you’ll be provided with your MEW address for interacting with the Ledger Nano S wallet. You can now send Ether and tokens from MEW to this new Ledger Ethereum address.
Conclusion
Using MyEtherWallet in combination with the Ledger Nano S hardware wallet is a great way to ensure all your coins and tokens are safely stored offline while still being quickly accessible for trading. Connecting these two wallets might seem complicated at first glance, but it’s quite simple if you follow the steps described in this guide.