What is Ledger Nano X? How Does It Work? (2024)

Ledger Nano X is one of the newest hardware wallets from Ledger, and it was introduced in 2019 as an update to Ledger Nano S.

The device’s basic premise is that it’s the simplest method to keep your Bitcoin and cryptocurrency safe offline. In the case of Ledger, the devices utilize a feature known as a secure element.’ This makes them more resistant to crypto hacking and theft, and thus, allows you to store your money in a secure cold offline storage environment. This also protects the private keys from viruses, giving it an edge over competing software wallets, which are connected to the internet all the time, in terms of security.

The screen of the Ledger Nano X is significantly larger than that of Ledger’s previous hardware wallet, the Ledger Nano S.

It is a powerhouse of a crypto wallet to manage your digital assets. Hence, in this article, we will focus on the instructions to set up the Ledger Nano X wallet. Along with that, we will answer some questions related to Ledger Nano X taxes and Ledger Nano X tax documents.

Connecting Your Ledger Nano X Wallet To ZenLedger

To import your Ledger Nano X wallet transactions via CSV:

• Login to the ZenLedger app.
• Go to the Imports tab.
• Select Exchanges, and choose Ledger Nano.
• Follow instructions in ZenLedger.

Connecting Your Ledger Nano X Wallet To ZenLedger For Your Crypto Tax Forms

• To import your Ledger Nano X transactions into ZenLedger for your crypto tax forms, all we need is your public wallet address.
• Paste your wallet address into the Ledger Nano X wallet address field in ZenLedger.
• Select the proper coin from the dropdown list.
• Select if the wallet is based in the USA or not.
• Then hit add a coin.

Ledger’s Background – A Bitcoin Protection Firm

Since 2014, Ledger has been developing hardware for Bitcoin security.

Since then, it has raised over $85 million from some of the world’s most prestigious investors. Its most recent funding round occurred in January 2018, when it raised $75 million. In June of 2021, they raised another $380 million.

The firm is currently valued at about $1.5 billion.

Ledger Nano X

Rather than relying on a crypto exchange or a fiat bank, it offers you more control over your money. Of course, banks and exchanges have their own advantages, but your money is still in their hands. Perhaps the exchange, like Mt. Gox, will be hacked, or perhaps your money in the bank could be stolen, which is not the case with Ledger Nano X, it offers you a sense of security.

The Ledger hardware wallet is a great place to store your private keys since it appears to be one of the most popular and well-known. A Nano X and a Nano S are available from the business. The Ledger Nano X differs from the Nano S in that it includes Bluetooth and can connect to a mobile app, whereas the Nano S can only connect to a computer (you can also still connect the Nano X USB-type C port to a computer). The Nano X is more secure and has additional app storage.

Understanding How a Ledger Wallet Works

Cryptocurrency users primarily engage with their digital assets through crypto wallets, and Ledger wallets, such as the Ledger Nano X, offer a secure means to manage these assets. The primary role of a crypto wallet is to interface with the blockchain ledger and facilitate transactions on behalf of the owner.

Checking Crypto Holdings

When utilizing a crypto wallet to assess the balance of digital assets, the wallet’s software performs a critical function. It scans the blockchain’s extensive list of addresses, meticulously searching until it identifies the user’s specific address. Once located, the wallet software retrieves and displays the precise cryptocurrency balance linked to that address, as verified by the blockchain’s records.

Facilitating Crypto Transfers

Another essential aspect of a crypto wallet’s operation is the ability to initiate cryptocurrency transfers. When a user wishes to send cryptocurrency, the wallet’s software takes charge of the process. It assembles critical transaction details, including the sender’s address, the recipient’s address, the transfer amount, and a cryptographic signature.

Cryptographic Signatures and Verification

Cryptographic signatures are pivotal in cryptocurrency transactions. These signatures go beyond mere digital stamps, representing a mathematical transformation of transaction data achieved using the sender’s private key. Significantly, these cryptographic signatures serve as indisputable proof to the blockchain’s nodes, affirming that the transaction initiator indeed possesses the private key associated with the sender’s account. This verification process acts as a robust safeguard against unauthorized transactions.

Private Key Security and Function

When initiating a transaction, whether through a Ledger Nano X or other means, the private key assumes a pivotal role. It provides unequivocal proof to every node on the blockchain that the transaction initiator is the legitimate account owner, authorized to execute the transaction. This principle underscores the importance of secure private key management, particularly when using hardware wallets like the Ledger Nano X, known for their robust security features.

Distinguishing Hardware Wallets

Bluetooth-enabled hardware wallets, such as the Ledger Nano X, stand out due to their unique approach to cryptocurrency security. While the ultimate objective aligns with that of software wallets—secure cryptocurrency management—the methodology differs significantly. Software wallets store private keys on computers or smartphones, potentially exposing them to various cyber threats. In contrast, hardware wallets enhance security by housing private keys within cryptographically fortified memory chips. This robust isolation ensures that the private key remains impervious to the vulnerabilities associated with computer or smartphone environments, thus significantly reducing the risk of theft or compromise.

Purchasing A Wallet

First and foremost, where can you get a hardware wallet? Purchasing one straight from the seller is the best option.

• Go to Ledger.com or Trezor.io (another popular wallet), or your preferred wallet. Do not purchase it from a third-party vendor such as Amazon or eBay. This is due to the fact that a private key is used to access your wallet.
• This key is a set of 24 words with Ledger. Consider it a lengthy passcode. These 24 words are the key to gaining access to your blockchain-based cryptocurrency.

Even if you misplace the Ledger wallet, as long as you have those 24 words, you can simply open a new wallet, type in those words, and you’re back in business.

Setting Up Ledger Wallet

Let’s take a look at how to set up Ledger Nano X.

• You’ll be prompted to download the Ledger Live app after you create a genuine Ledger wallet, which you can do at Ledger.com/start. This is available on both a mobile device and a desktop.
• On the screen, there are directions to assist you. To begin, turn on the device and set up an 8-digit PIN.
• The Ledger’s screen will then display 24 words, one at a time, numbered, that you must write down on each of the three “secret recovery phrase” cards included in your box. Double-check that each word corresponds to the proper number. For example, 1 denotes a cat, 2 denotes a doctor, 3 denotes an extra space, and so on.
• Keep each of these cards in its own, safe place. Perhaps in a home safe deposit box, a bank safe deposit box, and with a trusted family member or acquaintance. These words are the only thing standing between you and your crypto.

Putting Your Wallet To Work

You will be able to access the wallet’s dashboard after creating your PIN and writing down your private key. Within the Ledger Live app, you may install a variety of crypto applications, including one for each coin. Install the Bitcoin app if you wish to store Bitcoin. Install that program if you wish to store Ethereum, and so on.

The gadget has two buttons that you may utilize to conduct crypto activities. To confirm a choice, press two buttons simultaneously, long-press both to bring up the dashboard, and so on.

Do I Get a Tax Report From Ledger?

Unfortunately, Ledger doesn’t provide a tax report. As an alternative, they offer transaction history details to be used to calculate taxes and report via crypto tax software.

You can connect the crypto tax software and the blockchains you interact with via an API. It then automatically creates a tax report by calculating your transactions, but there are no specific Ledger Nano X tax documents.

Does Ledger Report to the IRS or Send Form 1099 to the IRS?

It should be noted that Ledger isn’t an exchange. It is a hardware wallet and its primary function is to hold cryptocurrencies. If you want to buy cryptocurrencies all you have to do is finish your KYC verification in Ledger Live. Hence, it is highly unlikely for Ledger to report to the IRS as they have nominal information to share. So, if you are wondering whether you have to report your Ledger Nano X taxes, you don’t have to.

Nonetheless, if you move your assets to Ledger from a centralized exchange, they will have records of where the crypto has gone. And, they have to share this data with the IRS, even if you transferred it to Ledger.

Can I Get a CSV Export from Ledger?

Yes, you can get a CSV export via Ledger live. Here’s how you do it:

• Log into the live desktop application
• On the left, choose the accounts from the menu
• Choose export operation history
• Choose accounts from which you want the history
• Click “Save” and save the file on your device

Please Note: If you are using crypto tax software to calculate your taxes, you’ll have to export your entire Ledger transaction history (however long that might be) to accurately determine your fair market value, cost basis, and long- and short-term capital gains taxes.

Does Ledger Report to Tax Authorities of Other Countries?

As mentioned earlier, it is a hardware wallet and it only holds cryptocurrencies. In case you want to buy crypto, you have to finish your KYC verification. So, if you are wondering whether you have to pay Ledger Nano X taxes or you will get Ledger Nano X tax documents or forms. You don’t have to pay any taxes on holding crypto in Ledger Nano X.

Conclusion

You can purchase, trade, and swap coins using the Ledger wallet. Cardano, Polkadot, Algorand, and other currencies can be staked as well. For staking, you may need to connect to a specific software wallet. Wyre and Coinify are the two suppliers from whom you may purchase coins. You may, however, purchase your coins through an exchange such as Coinbase or Kraken and send them to your wallet.

That’s all there is to it.

‍ZenLedger makes it easy to automate your Crypto Taxes by connecting to exchanges, aggregating transactions, and auto-filling common IRS forms. Unlike many competitors, we also provide complete transparency in how the cost basis and other factors are calculated, which provides tremendous support in the event of an IRS audit or any other issues.

Ledger Nano X FAQs