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Using a hardware wallet: Part II – Setting up a Ledger Nano S

May 7, 2018

In Part I – Introduction we went over the four main risks you want to consider when storing your bitcoin or other cryptocurrency. By choosing the Ledger Nano S (or the Trezor) you are starting down the right path toward maximum security. Right out of the box these devices protect you against custodial risk: Only you will have access to your crypto assets. The Ledger Nano S also currently supports the most number of crypto assets of any hardware wallet, making it ideal for use with Athena Investor Services. Let’s proceed to set one up!

UPDATE July 27, 2018: Ledger has released a new unified desktop application called Ledger Live that combines most of the needed PC-side software into one solution. Ledger Live is available for Windows 10, Mac, and Linux. If you have Windows 7 or 8 you will need to continue to use the Chrome apps described below. We have left the Chrome app instructions on this page up for those users, however Ledger Live users should follow a new set of instructions from Ledger's website:

https://support.ledgerwallet.com/hc/en-us/articles/360006395553

How to properly setup the Ledger Nano S

Because Ledger continues to update the features and software of their products, the most up-to-date information is going to be available on Ledger’s official US website:  https://www.ledgerwallet.com. This guide will be based on their resources. Steps 3 and 4 can be reversed if you have trouble updating the firmware before setting up the wallet. Just write down your recovery words in Step 4 and, once you see the main screen with the Settings icon, open Ledger Manager on your PC and proceed with Step 3.

  1. The first step is actually buying a Ledger from their official website or via an authorized distributor (which typically includes Amazon).There have been reports of ways to potentially tamper with a Ledger Nano S or provide false and dangerous instructions in the box. Even if you purchased from an untrusted source (such as eBay), you will not likely be at risk if you follow all the proper setup procedures listed here and on Ledger's website. For example: Install the latest official firmware (which can detect tampered devices) and always create a new 24 word seed within the Ledger itself. Never use an externally provided seed. 
    
    See: Is my Ledger hardware wallet genuine?
  2. Note: Ledger has now released Ledger Live, which is their unified desktop app for Windows 10, Mac, and Linux. Please use Ledger Live if you can over the Chrome apps assumed in these instructions.
  3. Once you receive your Ledger and have checked if it is genuine, you are ready to upgrade the firmware to the latest version. The firmware is the control software onboard the Ledger device itself. Please download the Ledger Manager app from the official website. Ledger Manager is an app that only runs on the free Google Chrome browser and will need Chrome or a Chrome-based browser (such as Vivaldi) to work. The link on the official website will open up a Chrome store window where you may install the app. After it's installed, you may use the same link to open the Ledger Manager or type the command chrome://apps into the address bar of your Chrome browser to find and open any Chrome app.
    
    A complete guide for upgrading the firmware is below. Please follow the step-by-step instructions carefully:
    
    See: How to update the Ledger Nano S firmware
    
    
  4. Once the Ledger is up-to-date, it is now time to create your first wallet! You should see a welcome screen with basic instructions for using the two buttons. You'll want to press the right button (checkmark/agree) when it asks "Configure as new device?". Enter a new 4-8 digit PIN code for the device. You will know you are on the right path if it presents you with the first of 24 individual words to write down (the recovery phrase or seed). Do not enter your own words unless you are recovering another wallet you created yourself.
    
    See: Ledger Nano S Configuration guide
    
    It is very important to write down your 24 word seed in order and store it securely and away from view (safe or deposit box). Do NOT take digital photos or store the words in an unencrypted file. Anyone who gains access to these words can see and move all current and future funds stored on that same seed.
  5. Now you may select the coins you wish to use, such as Bitcoin, Ethereum, Ripple, and many others. Don't worry, this is not a permanent selection; you may always add more coins later or even delete coin apps on the fly without affecting their balances. You will want to open Ledger Manager to install or remove the different coin apps, as well as special purpose apps such as the FIDO U2F for second factor logins on compatible websites.
    
    Please refer to the below page for a list of all assets the Ledger is compatible with along with the desktop programs needed on the computer side. Every coin needs both a matching app on the Ledger device side (such as "Bitcoin" or "Zcash") as well as a program on the computer side that you are using to interact with the Ledger (such as "Ledger Wallet Bitcoin").For example: If I wanted to use Bitcoin, Litecoin, Bitcoin Cash, and Ripple on my Ledger, I would need to install an app for each of those onto the Ledger device using Ledger Manager. I would also need to install "Ledger Wallet Bitcoin" and "Ledger Wallet Ripple" onto my computer to interface with these four coins. You can see the program pairings under the "Compatible wallet" column on the page below:
    
    See: https://www.ledgerwallet.com/cryptocurrencies
    
    The good news is that the "Ledger Wallet Bitcoin & Altcoins" program for your PC or Mac is all you need to interact with most of the assets the Ledger supports. A few other assets like Ethereum, Ripple (XRP), Neo, and Stellar require their own separate programs or websites to interact with the Ledger. Follow the above guide for determining what you need for each asset. You can also see the PC-side programs available via the link below:
    
    See: https://www.ledgerwallet.com/apps
  6. Finally, we can get down to actually using the Ledger Nano S! Make sure the Ledger is connected and you've unlocked it with your PIN. We can now access the individual accounts. Examples for Bitcoin, Litecoin, Bitcoin Cash, and Ripple are given below:
    
    - Bitcoin: Open Ledger Wallet Bitcoin on your computer while also selecting the "Bitcoin" app on the Ledger device screen. Ledger Wallet Bitcoin should begin loading. You'll be presented with options for Bitcoin or Bitcoin Cash, but choose Bitcoin. Next, choose Segwit unless you specifically want a Legacy address. Your new wallet should load with one account and a zero balance.
    
    - Litecoin: Open Ledger Wallet Bitcoin (that's no typo) on your computer while also selecting the "Litecoin" app on the Ledger device screen. Ledger Wallet Bitcoin should begin loading. Next choose Legacy or Segwit (it doesn't really matter at this point). You'll see your wallet open up with your first account.
    
    - Bitcoin Cash: Open Ledger Wallet Bitcoin on your computer while also selecting the "Bitcoin Cash" app on the Ledger device screen. Ledger Wallet Bitcoin should begin loading. Select Bitcoin Cash this time. Since this is a new wallet, select Split to load a brand new Bitcoin Cash account. You should see your new account.
    
    - Ripple XRP: Unlike the previous three coins, which all shared the same PC-side program, Ripple support requires a separate program called Ledger Wallet Ripple. Download it from the apps link above if you haven't yet. Once it is installed (it's a full program, not a Chrome app like the others), launch it from your Start menu (or Mac equivalent). Make sure you also select the "Ripple" app on the Ledger device screen. Ledger Wallet Ripple should open with no transaction history and your first Ripple address.
    
    Looking for more? Ledger has an application guide for every currency they support: https://support.ledgerwallet.com/hc/en-us/categories/115000811829-APPLICATIONS-GUIDES

Seem complicated? We agree, but it’s worth the time investment. Clients of Athena Investor Services can always call or email us for personalized assistance. Once you’ve gone through these 5 steps, however, you’ll be ready to begin receiving and sending assets with your Ledger Nano S.


 

By making a backup of your 24 word seed and storing it safe from both snooping and fire/water/theft, you’ll have protected yourself against both the first and second risks discussed in Part I. In Part III we discuss a necessary habit to establish when sending and receiving crypto assets with your Ledger Nano S. Proceed to Part III: Best Practices for Safe Transactions