Bitcoin Hardware Wallets Just Turned 10 Years Old

Commercially available Bitcoin
Bitcoin
hardware wallets are celebrating a significant milestone in reaching their tenth anniversary. The world’s first hardware wallet known as the Trezor Model One launched on July 29, 2014.

Since then the hardware wallet industry has expanded to a highly competitive sector including brands such as Ledger, SafePal
SafePal
, Keystone, Coldcard and many others. According to Ledger CTO, Charles Guillemet, its devices now secure over 20 percent of the overall crypto market. The industry is expected to reach a value of $1.6 billion by 2029.

Trezor, co-founded by Pavol “Stick” Rusnak and Marek “Slush” Palatinus, began as a hobby project aimed at creating hardware wallets for personal use and quickly gained traction after the first bitcoin conference in Prague in 2011.

Despite Trezor’s early success and continued influence, Stick, who has become less publicly active in recent years, agreed to an interview on the 10 year milestone. He outlined how early adopters expressed a need for secure bitcoin storage solutions that didn’t rely on exchanges.

Stick recalled, “We realized that while some users understood bitcoin’s potential, they lacked the technical skills for secure self-custody.”

The initial prototypes were built on Raspberry Pi, featuring additional boards with a display, two buttons and a USB port. Trezor shared an image from its archive of the original 3D printed hardware wallet, believed to be the first bitcoin hardware wallet ever made.

Stick emphasized that the journey from prototyping to mass production was challenging. “Making hardware is harder than making software. Iterations in design are more expensive and take more time, but you still need to iterate many times before you start mass production.”

This iterative process eventually led to the first commercially available Trezor devices. Despite initial doubts about market demand, the devices quickly sold out, highlighting a significant need within the community.

He told me that the response from the crypto community exceeded expectations. “We thought there would be a small-scale demand for Trezor. Our initial target market was the few hundred people we knew on the bitcoin Talk Forum.”

After being denied by Kickstarter, Trezor launched a pre-order campaign for 1,000 devices, swiftly expanding to 30,000 units due to high demand. This success allowed Trezor to bootstrap without seeking VC funding, maintaining independence in its development process.

When the Model One was first released as the Trezor Classic it retailed for 1 BTC with a Metallic version available for 3 BTC. By today’s standards these devices would cost tens of thousands of dollars. However, at the time the devices cost $100 – $300 each.

Reflecting on Trezor’s impact over the past decade, Stick noted their commitment to open-source standards and interoperability, which has paved the way for other hardware wallets.

Stick “recognized the need for such devices early on and committed to making everything we do as open-source and based on open standards,” fostering a collaborative ecosystem, benefiting the broader crypto community.

As hardware wallets evolve, they face new challenges and opportunities. Stick highlighted the increasing regulatory scrutiny and the importance of education in navigating these complexities.

Concluding the interview Stick said “We are now in the ‘then they fight you’ phase. Governments are trying to regulate bitcoin and its usage. State agencies are attempting to intimidate developers away from working on bitcoin.”

Despite these challenges, Stick believes in the enduring potential of bitcoin and the continued relevance of self-custody solutions.

Veronica Wong, CEO and Co-Founder of SafePal, echoed this sentiment when I spoke to her recently via Telegram, emphasizing the evolution of hardware wallets from complex devices for advanced users to more accessible solutions for mainstream adoption.

“Hardware and decentralized wallets are now seen as a viable alternative to centralized exchanges, as more users embrace self-custody and the freedom it offers over traditional financial platforms.”

Innovations such as account abstraction and multi-party computation are expected to simplify the user experience further, making crypto more accessible without compromising security.

Lixin Liu, CEO of Keystone Wallet, shares a forward-looking perspective on the role of hardware wallets. Speaking via X (formerly Twitter) direct message he said, “Moving forward, hardware wallets will evolve dramatically, propelled by an influx of adoption and innovation, making it the most important tool.”

He envisions a future in which hardware wallets are a fundamental part of education, with simplicity, affordability and transparency becoming essential features.

As the crypto industry faces an increasing amount of time in the spotlight, security remains a paramount concern. Liu emphasizes the importance of education, staying updated on scamming tactics and using open-sourced hardware wallets to mitigate risks. “The users must adopt a proactive and knowledgeable approach to safeguard their assets,” he advises.

The journey of hardware wallets over the past decade showcases the resilience and innovation within the bitcoin community. From the initial prototypes to the widespread adoption of secure self-custody solutions, these devices have also played a crucial role in the evolution of the broader crypto market. Many hardware wallets now support multiple cryptocurrencies beyond bitcoin.

However, there has also been an increasing trend of bitcoin only firmware for hardware wallets as Bitcoiners look to reduce attack vectors by removing the ability to store other coins and tokens. Self-custody of bitcoin is a big task, essentially taking on the responsibility usually reserved for banks and institutions with significant security budgets and layers of security.