An Offline Key is the Only Key: How Ledger Wallets Store Private Keys Offline

When it comes to keeping your digital assets secure, understanding private keys is essential. To explain, your crypto wallet doesn’t actually store crypto assets—those stay on the blockchain. Instead, your crypto wallet stores the private keys that allow you to control specific blockchain addresses.

Why is that important, you may ask? Well, anyone with access to your private keys has access to your accounts. In other words, if anyone gets your private keys it’s game over.

So how does an attacker get hold of your private keys exactly? 

Mostly, victims of scams don’t hand over their private keys willingly, they typically reveal them to attackers via an internet connection. Put simply: your internet connection is the biggest threat to your private keys, and thus your crypto assets. 

To combat the threats that internet connections bring, Ledger devices store your private keys offline in a Secure Element chip, isolated from your internet-connected device and any potential malware it harbors. 

This is one of the core principles of the Ledger security model. 

To understand why, let’s first dive into why storing private keys offline is so important.

Online Devices are Susceptible to Online Threats

Whenever you use a crypto wallet directly on an internet-connected device (such as any hot wallet), you are vulnerable to malware. Depending on the device’s security features, it could be installed on your computer or smartphone physically or remotely.

Malware can come in many different forms, but it’s essentially just a program designed with malicious intent. Malware targeted at crypto users usually aims to do one of two things: discover your seed phrase or private keys by reading your device’s sensitive files; or take control of your laptop or smartphone’s screen and convince you to sign malicious transactions. 

Hot wallets (software wallets) are extremely vulnerable to these threats since they store private keys directly on the host device, such as your phone or laptop.

That might not sound so risky to you, but in fact, your laptop or smartphone is not secure. Malware can be complex, and unfortunately, laptops and smartphones are built for performance, not for security. They don’t have the technical capability to store private keys securely, and they don’t drive their screens with secure chips either. Simply, your internet-connected devices offer too many opportunities for a hacker to find and exploit.

Offline Storage is Key for Secure Self-Custody 

Downloading malware onto your device is all too easy if it’s connected to the internet. The only way to protect your private keys from online threats is to keep them offline and isolated from internet-connected devices.

To achieve that, you need a separate device for storing private keys from surfing the net. That’s exactly the purpose of a hardware wallet: it provides a physical option for private key storage that doesn’t connect to the internet.

To store private keys, a hardware wallet needs a chip. To keep private keys secure, that chip must also be resistant to remote and physical hacking.

Ledger hardware wallets store your private keys and sign transactions offline in a Secure Element chip, isolated from your internet-connected device. This keeps your private keys safe from potential malware on your laptop or smartphone. Ledger devices use a Secure Element chip because it’s designed specifically for security and is resistant to both remote and physical hacking.

The Secure Element also drives Ledger’s secure screens, so you can trust the details they show. With their offline storage in hack-resistant chips and isolation from other internet-connected devices, Ledger devices let you avoid online threats and achieve peace of mind.

But seeing as the blockchain relies on people using their internet connection, you might want to know how your Ledger device signs a transaction offline. Let’s explore the process to explain how it works:

How Ledger Devices Sign Transactions Offline

Your Ledger device splits the transaction process into an “offline” part and an “online” part. While your Ledger device handles the signing of transactions, it cannot broadcast transactions itself, so it relies on a separate internet-connected device, such as a smartphone or laptop

To execute a transaction, you must first initiate it using your internet-connected device. The transaction details are then sent to your Ledger device via a USB cable or NFC. 

At this point, your Ledger device displays the transaction details on its secure screen and prompts you to sign the transaction. This process occurs completely offline within the Secure Element chip. This is the most crucial part of the transaction, as hackers can tamper with transactions before they are signed. But with a Ledger device’s Secure Element chip, you can rest assured the signing process is executed offline and out of a hacker’s reach.

Once the transaction is signed, it’s sent back to your internet-connected device via a USB cable or NFC. Since the transaction is already signed it cannot be tampered with – even if your internet-connected device is compromised.

At this point, your laptop or smartphone can broadcast the transaction to the blockchain using its internet connection with confidence.

Ledger’s Approach To Security 

Offline storage is just the first key aspect of Ledger’s security model, but there’s a lot more behind why Ledger is still the best-selling hardware wallet company in the world.

Ledger devices have a few other key security measures, including their secure OS, guaranteeing your apps stay isolated, and the Secure Element Chip, offering crucial resistance against hacking. Plus, unlike your smartphone or laptop, the screens of Ledger devices are also driven directly by the secure element, allowing you to trust the information it displays.

Beyond these key technical features, Ledger devices also offer a PIN code, meaning that even if your Ledger falls into the wrong hands, no one can open it at will. And the Ledger Donjon, our team of white hat hackers, are constantly testing and developing our devices’ security features to guarantee your devices evolve along with the scams they face.

So if you’re ready to embrace truly secure self-custody and a hardware solution that keeps your keys under your control, what are you waiting for? Secure self-custody doesn’t have to be complicated. Get a Ledger!