“The Ledger wallet is a fantastic way to store the private keys to my crypto, but what would happen to them if Ledger went out of business? Would I lose them?”
In these troubled times, that’s a question we often receive. So let’s opt for the short answer: no, not at all. You won’t lose a penny!
And that begs the question of…
Where do your coins live?
When you own cryptocurrency, you actually own the right to use the cryptocurrency. Your coins are associated with a set of keys: your private and your public key. You can think of your public key like a mailbox.
The private key is your access to your cryptocurrency. Like a real key, you wouldn’t go handing out copies to everyone, you’d keep it safe and secure.
The crypto coins live on the blockchain and the keys to your coins live where you choose (ideally, in a secure location where no one else can access). The coins themselves don’t exist on any device or platform, not even on Ledger devices. Your wallet only stores and protects your private key.
Do I need Ledger to get to my cryptocurrency?
“So Ledger is great and it helps me keep my keys safe, but what if it goes out of business? Will I lose my crypto coins?!” Nope, you aren’t reliant on Ledger to access your funds even if you use Ledger to store your private keys.
That’s why our sales skyrocketed during the FTX collapse: because we don’t own your private keys. With Ledger, there is no third-party risk. That’s unprecedented.
The slightly longer answer: Ledger doesn’t operate in a closed system where your private keys and coins are locked into only certain devices, and this is thanks to the BIP-39 standard, an industry wide protocol that allows crypto wallet providers to use a common emergency backup format.
This means that you are able to access the keys to your cryptocurrency even if your Ledger wallet wanders out of your possession (by loss or theft). Your recovery phrase will let you retrieve your keys on another wallet even if Ledger isn’t around anymore.
True security doesn’t tie you down
So using a Ledger device does not mean that Ledger has access to your crypto or any of your data; rather, it’s a meticulously designed solution that allows you to easily, securely and practically manage your crypto, without giving up any of your control.
That is financial freedom.