Like other hardware wallets, Ledger Nano S stores the user’s private keys and does not transmit them anywhere outside. According to BIP39, a closed master key is generated from the 24 words of the seed-phrase, and the other keys are hierarchically generated from it. Knowing the seed, you can recover all the key chains and associated coins in case of loss of the wallet. One seed phrase is used to generate the keys of all the cryptocurrencies that will be stored in the wallet.
The keys themselves are not sent to the user’s computer: the program (wallet) on the computer sends the generated transaction to the hardware wallet, and the signing occurs in the hardware wallet, and then the signed transaction returns to the computer and is sent to the network. This way private keys don’t leave the Ledger Nano S, and it’s harder for potential attackers to get them.
Package Contents
Ledger Nano S comes in a small white cardboard box. In the box, in addition to the wallet itself, there are:
-
micro-USB cable for connecting to a computer;
-
A neck lanyard;
-
A lanyard to wear as a keychain with an extra ring;
-
A set of cards for recording the seed phrase you need to recover your keys;
-
A notice that the wallet checks the firmware every time it’s plugged in, and a special chip (secure element) to prevent any attempt to remove the keys;
-
A quick tutorial recommending that you go online and follow the instructions to get started with your wallet.
Ledger Nano S purse externally very similar to the usual flash drive, but without the external connector USB, but has its own little screen and two buttons controls. The size of the device (98x18x9 mm) and weight of 16 grams allows you to carry it as a keychain without any problems. Connection to a computer and power is through a single micro-USB connector.
Ledger Nano S internal device
The wallet is easy to disassemble: just bend a little and detach the metal protective cover, and the back panel is attached to the small plastic latches. It is enough to pick it up with your fingernail or a thin plastic card to make the cover snap off.
Inside is a single printed circuit board that shows an STM32F042K microcontroller next to the USB connector, and a Secure Element ST31H320 next to the display connector, which is used to store the physical private keys. The Ledger Nano S has no battery of its own and only works when connected via USB to a computer, tablet or smartphone.
Judging by the markings on the back cover, this copy of the wallet was released in March 2018. The firmware code, including cryptocurrency clients, can be found on GitHub.
Connecting and configuring Ledger Nano S
The developers declared the support of operating systems Windows 8+, macOS 10.8+, Android 7+ and Linux, although the wallet also worked on Windows 7. To start working on your computer, you need to put the program Ledger Life – a command center that combines all the interfaces for working with purses of cryptocurrencies, utilities to update Ledger Nano, installing purses inside it and other operations with the wallet. Initially Ledger Nano S comes empty, and first you will need to install the wallet applications of the cryptocurrencies you plan to work with in the future.
At the initial connection the wallet will ask for a pin code. It is not necessary to use all digits in the pin code, you can make it shorter by confirming the entry. This is done, as well as all subsequent operations, using two buttons. Left indicates left or down, right – right or up, simultaneous short press – entry, simultaneous 3-second press – lock wallet. At first, the controls may be a bit confusing, but by the time you finish the initial setup, you’ll probably be able to press the right buttons automatically without thinking about it.
After you set a pin code the wallet will ask you to save 24 words of the Sid phrase. It is suggested to write them on a card from the kit, but they can also be stored electronically if securely encrypted and restricted access. Remember, by getting the sido, the attacker will get all the cryptocurrencies stored on Ledger Nano.
The wallet will show the words one by one, and you have to manually scroll through each one, then confirm that the phrase is saved. The wallet will not take your word for it and will ask you to enter all the words in the correct order to continue. It’s quite a painful task, but keeping the seed phrase secure is really important, and it’s a one-time action, so we patiently do it.
After these operations, the wallet will be available in Ledger Life. First of all it is recommended to check if the firmware needs to be updated to a newer one. There may be security patches in the firmware, so you should not neglect them.
After all these operations the initial setup of the wallet can be considered complete.
Working with the Ledger Nano S wallet
In order to demonstrate how the hardware wallet works, let’s install the Ethereum app on it.
In the Manager tab of Ledger Life, click Install on Ethereum and follow the program instructions. If all goes well, the Ledger Nano S interface will have an Ethereum app in addition to the Settings app.
To get a new address, click Receive in Ledger Life, unlock the hardware wallet, and log in to the Ethereum app on it. The program will show the address for copying and will ask to check it with the address in the wallet itself. Verify, confirm, and we have a recharge address.
As an example I topped up the indicated address with 1 ETH. The Ledger Life program successfully showed replenishment, even without a connected hardware wallet.
Now let’s check what happens under negative scenarios, and whether we can send that 1 ETH back.
As an example, let’s simulate an incorrectly entered PIN several times. Three times is enough for the wallet to erase the internal memory and require recovery from the cid-phrase.
Set a new PIN as requested by the wallet, and enter the previously saved seed-phrase words. You will have to spell all 24 words using the two buttons on the wallet. The good thing is that after entering three letters, the wallet offers prompts for possible words, and you don’t have to enter them all.
To start, enter the wrong phrase – it’s interesting to see what happens. But nothing interesting happened, the wallet cursed “Recovery phrase invalid” and refused to restore. Okay, fine, we enter the correct one and get a recovery confirmation, then we reinstall the Ethereum app and try to withdraw our ether:
Open the Ethereum app on the hardware wallet, verify and confirm the transaction:
The transaction was successfully signed and sent to the network.
Problems with the Ledger Nano S
During the process of working with the Ledger Nano S wallet, many times there were problems with the connection. The operating system would not see the driver, Ledger Life would say “Oops, couldn’t connect to device” or “Sorry, try agin (websocket error)”.
Sometimes it helped to change the cable or reconnect the wallet, run Ledger Life as administrator, and once it helped to remove the device driver in Windows Device Manager, all the previous methods did not work.
Also, Ledger Life’s interface looked quite interesting when it had all the images falling off:
But in general there were no intractable problems with the Ledger Nano S wallet during the tests and work, it performs its functions.
Conclusion
Ledger Nano S is an inexpensive solution for storing private keys on a separate secure device and reducing the risk of their leakage that is critical for any cryptocurrency and tokens. A hardware wallet is safer in this regard than a personal computer, smartphone or tablet, but you have to keep the SEED phrase a secret;
The signing transactions take place inside the wallet, the keys do not leave it, only the signed transaction is returned to the wallet program on the PC after the user confirms the transaction. Wallet can work with almost all popular cryptocurrencies and operating systems. In the case of breakage or loss of the wallet, you can restore the funds by using the SEED phrase. An intruder can’t use your wallet if he or she doesn’t know the pin code.
Completely stable operation Ledger Nano S can not be called, reliable contact will not be with all USB-laces that you can meet, but critical to the work of the failure or intractable situations in all the time of testing the wallet has not occurred. However, do not forget that hardware wallets sometimes find vulnerabilities as well.. If you still have questions about the wallet, you can ask them on our forum. The cost of the Ledger Nano S at the time of writing the review was just under $100.