Cryptocurrency hardware wallet ratings methodology

A hardware wallet is essential for secure cryptocurrency storage. It’s a physical last line of defence against remote theft of your cryptocurrency, so choosing the right wallet is important.

But there are also a number of different factors to consider when choosing a wallet, so we’ve created a hardware wallet star-rating scheme to help you find the best wallet for your needs.

These ratings are intended to serve as a starting point and should be used alongside full in-depth reviews.

The system gives wallets a score out of 10 for 3 components: security, functionality and cost. These scores can stand alone as well as be aggregated and visualised as a total score out of 5 stars.

The exact methodology and weighting for each component are explained below.

Our ratings

We rate cryptocurrency wallets using a system of one to five stars.

★★★★★ — Excellent

★★★★★ — Good

★★★★★ — Average

★★★★★ — Subpar

★★★★★ — Poor

How we rate security

Security is paramount. It’s the whole point of a hardware wallet, so it accounts for a full 50% of the aggregated final score.

For a wallet to receive a perfect score, all of its hardware and software must be completely open source. It must not have any dangerous vulnerabilities and must not have ever put its existing users at serious risk. It must have extremely reliable systems for guaranteeing wallet legitimacy, and it must be highly resistant to supply chain attacks.

Scores were reduced for wallets with software that is not open source, although consideration was given to the reasons for this and whether independent security experts have still been allowed to get a look at the software.

Wallets that have not shipped enough units to attract heavy security scrutiny also lost points. Where more theoretical hazards were present, scores were based on the likelihood of these posing a practical threat to users.

Please note that, although it’s a matter of some debate among security researchers, the scores in this section were made under the assumption that the secure elements used in Ledger and CoolWallet S hardware wallets are more secure than the chips used in Trezor and KeepKey wallets, and that there are still some potential vulnerabilities associated with Trezor and KeepKey wallets.

How we rate functionality

This category encompasses all-around user-friendliness and functionality. To receive full points, a wallet must be both mobile and PC compatible with either Bluetooth or NFC support. This broad and important category accounts for 40% of the total score.

Wallets could receive higher scores by being smaller and lighter as well as for having larger, full-colour screens. A wider selection of supported cryptocurrencies was also considered with 1,000+ supported cryptocurrencies (including ERC20s) serving as the benchmark for “full support”.

Ease of use, in the form of compatible wallet apps, was also considered. Similarly, the actual process of using the wallet to secure a transaction counted towards the final score. Faster and easier wallets earned more points here.

How we rate cost

Given the important role cryptocurrency hardware wallets play, and the potential value of the cryptocurrency they may secure, it’s probably not worth sweating a price difference of a few dollars, especially when spending more means a better wallet. As such, this category only accounts for 10% of the total score.

However, it’s still worth emphasising major price differences, and sometimes a simpler and cheaper wallet is exactly what you’re looking for. That’s why this category is graded in a way that makes the cheaper wallets pop out, so they’re easier to spot, without unduly penalising wallets for being a little bit more expensive.

Specifically, we started by looking at the cost of each wallet on the official website of each brand, measured in Australian dollars as of 20 November 2019, and by giving each wallet 3 out of 5 stars to start with.

Wallets that were above the median price of all compared wallets immediately lost one star, while those which were below the average immediately gained one star, while the median-priced wallets remained at three stars.

The cheapest and the second cheapest wallets gained another full star and half star respectively whereas the most expensive and the second most expensive wallets lost another full star and half star respectively.