Can ledger hardware wallets be hacked? (2024)

Can the ledger be hacked?

The threats to your crypto aren’t just online – your hardware wallet can be a target for physical attack, putting your keys at risk. So how do you know if your Ledger hardware wallet is resistant to physical attack? Private keys are the fundamental element of cryptocurrency ownership. Yes, it’s the old crypto adage, “not your keys, not your coins.” Bad actors are out there trying to get to your crypto, and most of the time, these threats are online. This is where a hardware wallet comes in handy. By storing your data offline, you can say goodbye to malware, spyware, and phishing scams that target your sensitive crypto data.

So hardware wallets are perfect and an impenetrable force, right? Well – it all depends on the wallet. Your hardware wallet protects your key from the lurking and potential dangers of the online world, but what if the device itself is attacked? The physical features of your wallet are important for its security. That’s why it’s crucial to choose wisely and understand the key vulnerabilities you might face.

Still not sure? Let’s take a look at the different ways a hardware wallet can be hacked and how your Ledger wallet specifically protects against each one.

How to hack a hardware wallet

There are a number of ways that a hardware wallet can be hacked, but in all cases, the goal of the attack is to gain access to sensitive data, such as the PIN code or those sweet, sweet private keys. Your secret PIN is your first line of defense for protecting your data, but that PIN is only as secure as the device itself. Here are some ways a hardware wallet can be attacked:

Physical attack on the device and damage to it

The idea behind a power fault attack is to overpower the power supply of the hardware wallet’s circuit board for a short period of time, in order to put the device into a slightly broken state. With this surge of energy, the device’s circuitry is confused and leaves sensitive information open to the attacker. The microcontroller chip is the key to the private keys, and hacking it opens it up. A power fault attack does this by using high-voltage spikes on the chip to make it vulnerable and gain access to the raw data. From here, it is relatively simple to retrieve the device’s PIN code and access the private data stored on the chip.

In short, a power fault attack is a brute-force attack using electrical currents that requires the attacker to have direct physical access to your wallet.

Lateral attacks through published information

The principle behind a side-channel attack is to observe the behavior of a hardware wallet while it is performing a transaction. We can think of a side-channel attack like a thief using a stethoscope to listen to a locked safe, and extracting information by listening to the changes as the tumblers are manipulated.

To perform a side-channel attack, an attacker would use an oscilloscope to watch the device’s power consumption as it works. By listening to the device’s noise and trying random PIN codes, you can see how the consumption behaves and how the behavior changes for each code. Different PIN digits leave different traces, making it easy to see which codes might work. Studying the power consumption behavior with each PIN digit attempt creates a database of information. This information, along with a script that guesses the PIN number one by one, is used to crack the code.

A side-channel attack listens to the information emitted by your device in order to figure out its PIN code. Once this is done, the attacker can use your wallet as if it were their own.

Breaking the hardware with a software attack

The principle of attacking a hardware security module (also known as an HSM) is to reverse engineer the firmware behind its operations to understand how it works. Attacking the firmware means understanding the technology better than the developers themselves and exploiting vulnerabilities. It is a process of research and exploitation.

The first step is to connect the hardware module to a computer, from where you interact with it to extract its underlying firmware. This is done by running a script that digs into the device’s code to find the firmware in binary form. However, we cannot understand binary code, so some reverse engineering is needed to convert the code into something that humans can interpret, in order to get the information to a point where it can be understood.

Using this reverse-engineered information about the firmware, the point is to try to find a point of vulnerability that can be exploited and allow the attacker to take control of the firmware and extract data from it.

Can a hardware wallet be kept safe from hackers?

Physical attacks are a threat whenever your device falls into the wrong hands – that’s why it’s crucial to understand how your wallet protects you and trust it to stay secure no matter what. Let’s be clear: not all hardware wallets are created equal. While keeping private keys offline is a common feature of all hardware wallets, the ability to protect you from physical attacks varies from wallet to wallet.

Why Ledger hardware wallet is the most secure wallet?

Ledger hardware wallets are designed to resist both physical and software attacks and are built to provide the highest level of security possible. This protection exists because of three critical parts of Ledger’s infrastructure: the secure chip used in their devices, the device’s custom operating system, and Ledger’s in-house team of hackers who find every possible vulnerability to ensure the safety of your keys.

Security chip with military strength, safe element

This type of chip is found in high-end security solutions such as passports and credit cards and is designed to resist highly sophisticated attacks. As one of the most secure chips in the world, Ledger wallets with Secure Element are resistant to a variety of malicious activities, such as fault injection, laser attacks, electromagnetic tampering, and power glitches. (Fun fact! Ledger wallets are the only hardware wallets that use SE chips.)

BOLOS Custom Operating System

Most hardware wallets don’t really use an operating system, but it’s an incredibly important part of the overall security infrastructure. Typically, hardware wallet providers build their wallets using a single, monolithic application for all different accounts: this is called a monolithic approach. Why is this a problem? It means that if one application is compromised, all other applications are also compromised.

To mitigate this, Ledger uses a custom-built operating system called BOLOS which has a multi-application approach that isolates applications and systems from each other, and ensures that if a vulnerability occurs in one application, its effects are isolated.

Ledger hacker team finds and reports weaknesses

Contrary to popular belief, not all hackers are bad. There are hackers who use their powers for good. Ledger has hackers on staff who use their special skill set to identify and fix problems in security systems, in order to make sure that the system has enough security strength. Basically, they are there to find problems so that malicious hackers cannot gain access to assets.

Ledger employs a team of white hat hackers to hack Ledger wallets identify any potential weaknesses and report them to the engineers. This way, Ledger wallets are made more secure.

Why you can rely on your ledger wallet?

Congratulations on completing your first deep dive into the security of Ledger hardware wallets! You now know exactly why Ledger wallets are considered the most secure hardware wallets on the market. Most threats to your cryptocurrency are remote, but physical attacks still exist. That’s why it’s so important to understand the components of your wallet and choose the right one for your security and peace of mind.

With Ledger’s Secure Element chip, custom operating system, and a team of dedicated professionals constantly working behind the scenes, you can rest assured that your hardware wallet is safe from attack, no matter what.