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RE: Is hardware wallets really the best option for storing cryptocurrencies?
Hardware wallets are a good option because even if the hardware itself is lost/stolen/damaged, you can still recover using the recovery seed. If you lose the recovery seed as well, then you're screwed. Same with any cold storage, really.
I haven't heard of recovery seed before, but this sound really great. How exactly does the seed work - is it just a code/password type of thing? Where does one enter it to recover the wallet?
Well, with hardware wallets, such as the Ledger Nano S, it gives you a 24 word recovery seed, a mnemonic phrase. Say you lose your Ledger. You purchase a new one and when you get it, it asks you if you want to create a new one or if you want to recover an old wallet. You'll select to recover an old wallet and enter that mnemonic phrase. At that point, it recovers the funds in that wallet that got lost. Ledgers are also compatible with myetherwallet.com so you can interact with the wallet there as well. Any wallet you get that's not on an exchange should provide you with a recovery phrase. It's recommended to keep this and backed up in different locations in the event one is lost/damaged.
Excellent. Thanks for the info! I placed an order for a Ledger Nano S, and expect it to be shipped some time in September. Looking forward to moving my funds to the hardware wallet.