A good hardware wallet is a must have for every cryptocurrency trader and investor. Although some people don’t like the idea of spending $100 for a piece of hardware it’s a small price to pay as compared to losing all of your crypto to a hack.
In this review we’ll be talking about the Coldcard, a crypto hardware wallet with a very unique set of features. Before we cover those features however it could be informative to briefly discuss all of the benefits that a cold storage wallet offers.
Hardware wallets are designed to be unhackable. They keep your cryptocurrency safe because every transaction must be approved by physically pushing a button on the device. Theoretically, you should be able to plug your hardware wallet into a virus infested computer without much risk to your funds.
Hardware wallets are also convenient in that they make it much simpler to back up your crypto holdings. Instead of having to write down and copy seed phrases for a bunch of different crypto wallets, it’s possible to write down the seed phrase for just the hardware wallet and then restore all of the other crypto wallets loaded on that device.
As a rule of thumb, if you have crypto that’s worth more than the cost of a hardware wallet you should probably invest in a hardware wallet.
With that in mind, let’s look at the Coldcard and what makes it different from other crypto wallets.
Here are some of the main advantages of using a Coldcard.
With its bulky body and full keypad the Coldcard is easier to use. Other hardware wallets have just two buttons for navigation.
A number of popular Bitcoin wallets have built in Coldcard support. For example, Electrum supports the Coldcard and even allows users to create offline transactions with an air-gapped Coldcard.
All of the Coldcard’s code is open-source, meaning that anyone can audit it if they want to make sure it is secure. More eyes on the code means bugs are also found faster and you know there are no back doors put in by the developer.
The Coldcard is specifically designed to allow for transactions without using the internet. While it is possible to use other hardware wallets without connecting them to the internet, the process is more difficult given that they don’t have a Micro-SD card slot like the Coldcard does.
The following are the drawbacks associated with using the Coldcard.
The coldcard costs about twice the cost of other leading hardware wallets.
The Coldcard can only custody Bitcoin whereas most other hardware wallets can custody dozens or hundreds of cryptocurrencies.
If you only plan on holding Bitcoin, this is probably a plus for you. Since only Bitcoin is supported, the total amount of code running on the device is much less than if it supported altcoins. This reduces the amount of ways an attacker can find ways to break into the device.
The Coldcard is much larger than other hardware wallets. Some investors may like this design as it makes the Coldcard easier to handle but it also makes the device harder to hide.
The first thing you’ll notice about the Coldcard is that it’s significantly larger than other hardware wallets. Wallets like the Trezor and Ledger are the size of USB thumb drives while the Coldcard is the size of a small calculator. That definitely makes it less compact and more difficult to hide in small spaces. However, there is an advantage to its size as well.
Being so small the Ledger and Trezor hardware wallets only have room for two buttons.
That can make it time consuming to navigate through their menus and enter passwords. With its full numeric keypad the Coldcard is easier to work with and information can be entered into the device much more quickly.
The other major feature of the Coldcard is that it only works with Bitcoin.
The Ledger and Trezor both support hundreds of cryptocurrencies (when you include ERC20 tokens). Thus the Coldcard’s functionality is severely limited as compared to other wallets. It’s really designed for Bitcoin investors and Bitcoin investors only.
The Coldcard has a bright OLED screen that can be read in the dark as well as an indicator light to prove that the device has not been tampered with. The Coldcard is made in Canada which inspires more confidence in the device than were it to be made in China.
The Coldcard’s primary selling point is security. It places heavy emphasis on being able to do everything on the device and without the need for any external hardware. It supports a number of features that other hardware wallet manufacturers have decided to not include with their devices. We’ll look at these Coldcard security features now…and there are a lot of them.
An air gapped device is one which never touches the internet so that it is fully impervious to hacking. The Coldcard claims to be the only hardware wallet which supports air gapped operation without jumping through a bunch of hoops.
Set up a wallet, send funds to it and even send outbound transactions all without ever connecting the Coldcard to an internet-connected computer! Using an air-gapped device is time consuming but it does represent the ultimate in security.
It achieves this through full native support of BIP174.
The Coldcard is the only hardware wallet that supports a Micro-SD card. That card allows an investor to easily back up the Coldcard’s seed phrase without having to write it down. Also, the Micro-SD card is what allows the Coldcard to sign Bitcoin transactions without being connected to the internet.
The Coldcard allows a user to enter a different pin which will open up a Bitcoin wallet completely separate from the main wallet.
So for instance if you have $10,000 worth of Bitcoin in the main wallet, you could put $200 in the duress wallet and if anyone forced you to open the Coldcard you could load the duress wallet without ever giving any indication that there are significantly more funds located in the main wallet. This is a great feature to mitigate the effects of the $5 wrench attack.
When you setup your Coldcard, you can specify a PIN that will render the device unusable.
Why would you want to do this?
Well maybe you don’t, but there are some people who may live in countries like Venezuela where using alternative currencies is illegal and so may need a way to destroy any proof they own them.
unlike the duress pin the brick pin really does completely destroy the Coldcard so that it can never be used again. Anyone who uses the brick pin will need to buy another Coldcard if they want to keep using the hardware device.
Of course, if you forget your brick pin and need to destroy the device in a hurry, you can always just drill a hole right into the secure element, and ColdCard makes it very easy to find it. Since the case of the ColdCard is translucent, you just need to look for the words “Shoot Here” and drill into it.
Every time you open your Coldcard the device will show you two words. Each time you open the Coldcard you should check for these words as they prove that the Coldcard is yours and that it has not been tampered with.
The biggest difference between the Coldcard and other cryptocurrency hardware wallets is that most other hardware wallets can custody hundreds of coins while Coldcard is only good for Bitcoin.
There are plenty of investors who are only holding Bitcoin so this will be fine for them. However, if you’re invested in other cryptocurrencies a different hardware wallet might be a better choice.
As far as price goes, the Colcard sits at about the same price point as Ledger and Trezor’s 2nd gen wallets. The Ledger Nano X costs about $119 while the Trezor T costs $159. The Coldcard sits right next to the Nano X at $120. more than twice as much as either of these hardware wallets and it only supports Bitcoin.
That high price point does buy something though as there have been concerns in the past about other hardware wallets like the Trezor.
So far the Coldcard has not been shown to have any serious security vulnerabilities and based on the amount of emphasis that the Coldcard team places on security, it’s possible that a Coldcard will always remain one step ahead of hackers.
If you’d like to purchase a Coldcard the best option is to buy it directly from the Coldcard website.
This will ensure that you receive an authentic product. Also, Coldcard ships all of their hardware wallets in tamper-proof bags to ensure that no postal carrier or other shipping agent tampers with the product.
While it may be possible to find an inexpensive Coldcard for sale on eBay or Amazon we highly recommend that you don’t purchase the wallet from one of these websites. A retailer could potentially tamper with the Coldcard so that it’s no longer secure and once you put your Bitcoin on the device they could steal it.
While the odds of this happening are probably fairly low, the risk is simply not worth saving $20 or $30. Buy the device directly from Coldcard and have the peace of mind that you’ll receive a trustworthy device.
Let’s get back to the main purpose of a hardware wallet.
It stores your keys in a secure element.
Cryptocurrency stored on an computer connected to the internet is an easy target for hackers, especially for Windows users.
When you use a hardware wallet, your coins are stored offline, making it difficult for hackers to steal them.
The Colcard uses a standard 24 word seed backup system. Using this system, the device spits out 24 words. If you ever lose your Coldcard, or it is destroyed or stolen, you use these 24 words on another wallet to get your coins back.
While you can write these down on paper, it is not recommended. This is your backup, after all. The best way to backup your seed is using something like the Billfodl.
The Billfodl is stainless steel. It allows you to recreate your seed using metal tiles, allowing your backup to be more resistant to fire, water and other environmental dangers.
For example, one user had $1 million worth of cryptocurrency backed up a piece of paper in a ‘fireproof’ safe. His house was flooded, and the water destroyed his paper backup seed. This would not have happened had the user been storing his backup seed on stainless steel like the Billfodl.
The Billfodl protects your seed from both fire and potential floods. For $80, this can be worth it depending on the amount of cryptocurrency you’re storing on your device.
Yes. While both devices are made by CoinKite, the OpenDime is a kind of Bitcoin piggy bank where funds should only be spent from the device one time. The ColdCard is meant to be used as many times as you want. You can spend and receive forever on it.
For more details about the open-dime, this short video review tells you a lot about it:
The Coldcard is a cryptocurrency hardware wallet that’s really designed with one person in mind:
The security conscious Bitcoin investor
Whether that’s a Wall Street trader who wants to secure his personal investment, or a family that wants to keep their life savings safe, the Coldcard is designed to be the most secure cryptocurrency hardware wallet in the world.
That security comes at a price and the Coldcard is expensive, but its comparable with all current gen hardware wallets like the Ledger Nano X and Trezor Model T. For the average person a Ledger or a Trezor might be just fine, especially for holding smaller amounts of cryptocurrency. However, if you believe there is a chance that someone might try to steal your Bitcoin in the future then the Coldcard is the best option.
Review by: Jordan Tuwiner