In June 2021, hackers sent fake devices to Ledger customers, ostensibly to protect against data leakage. Restoring wallets required entering a seed phrase, which was used to gain access to user funds afterwards. 🔑
A few months later, the Swiss company Tangem AG responded to the accident by introducing a new hardware wallet in the form of a plastic card and without a seed phrase - Tangem Wallet. 💳
How does it work and why does it work - all that in the article.
What is a seed-phrase?
A mnemonic phrase (a seed phrase or just a seed) is a random sequence of 12 or more words that is required to restore access to funds in case of loss, theft or damage to the crypto wallet.
Why isn’t it 100% percent safe?
Well, firstly, nothing is and secondly, the seed-phrase is just a set of words that can be copied or photographed. Moreover, if it is compromised, you will never know when the leak happened and who is responsible for it because it is you, who could not keep your phrase in secret and there is no one else to blame. 🤷♂️
“You can buy a hardware wallet with the most innovative security features. In this case, the backup will be a simple combination of words that can be photographed or rewritten. This is enough to get access to your money. The seed phrase is “Schrödinger’s private key”. It is not known whether it is compromised or not, because a piece of paper or a file with a seed phrase does not have any reliable protection mechanisms,” - explained the technical director of Tangem AG.
How is Tangem different?
Apparently, Tangem Wallet provides a surprisingly simple and even somewhat outdated solution for a complicated problem - plastic cards. A regular 70$ set will give you three cards, each being an NFC key to unlock the Tangem app on your phone. Cards do not require a PIN or a password - the only thing you are responsible for using those is not allowing anyone to steal the card from you. There is, however an option to set a unique password for each of the three cards in case the get stolen (And we would highly recommend doing that because you never know ).
Using the highly popular S3D350A chip the cards provide their users with an IP68 dirt-water resistance standard and Common Criteria EAL6+ (Evaluation Ansurance Level) mechanical resistance rating - Ledger or SafePal can’t offer you that, holding the EAL5+ certification. The software was also certified by Kudelski Security audit company. 👮♂️
My biggest strength - my biggest weakness
For safety reasons Tangem does not produce more than three cards for every wallet, because otherwise the sense of using their wallet is none. That way you lose access to all your assets if all three cards get stolen/lost.
Other significant disadvantages
The wallet still lacks connectivity, supporting just 23 blockchains, which isn’t particularly impressive, when compared to other multi-asset wallets. The most used nets such as Bitcoin, Ethereum, BNB Chain, XRP, Cardano, Solana, Dogecoin, Polygon, Tron, Avalanche, Ethereum Classic, Litecoin, Stellar, Bitcoin Cash, Tezos, Fantom и Arbitrum are, however, supported, so unless you use your wallet to buy shitcoins and dump them afterwards (Shame on you), you should be alright. To connect Tangem with dApps, you will need to use WalletConnect, making it possible to interact with around 450 different ones. 🤟
The idea is a really creative way to solve an everlasting problem, but it still requires some work to perfect. Developers are certainly passionate about their product, so we will definitely be seeing more wallets of this type soon.
Stay tuned 📻