How to Use a Hardware Wallet for Crypto Security – A Guide to Getting Started
Hardware wallets provide users with a cold storage solution for cryptocurrency, providing an offline, physical space in which to manage and recover wallets if stolen or lost.
When using a crypto hardware wallet, it’s crucial to heed these tips for maximum digital and physical protection.
Buy from a Reputable Vendor
Hardware wallets differ from mobile wallets in that they do not rely on apps or software, reducing the risk of malware or other online threats and protecting you and your private keys from other devices and online threats. They also enable offline storage of private keys.
Hardware wallets store an encrypted private key and generate a public address that others can use to send cryptocurrency directly. While your private key never leaves the wallet itself, it can still be used to sign transactions that establishes digital records of proof that they were authorized.
Hardware wallets also store a recovery seed phrase, which can be used to recreate devices in case they become lost or damaged. To keep it secret and safeguard its safety, this phrase should ideally be kept locked away safely such as in a safety deposit box; further, its storage in an opaque tamper-evident seal helps minimize theft threats.
Keep Your Private Keys and Recovery Phrase Secure
Crypto hardware wallets provide a high level of protection and ease of use when managing cryptocurrency, but they should still be treated responsibly by users.
At setup, most hardware wallets generate a recovery phrase from the BIP39 word list; you should write this down and keep it somewhere safe and offline as this will allow you to restore your wallet should its device become lost, stolen, or damaged.
As part of your wallet security efforts, it is also crucial that its PIN remains protected. A simple PIN could make it easy for attackers to gain access to your funds, so ensure you change it regularly or add letters and special characters for added complexity. Finally, ensure the wallet itself remains physically safe by keeping it locked away in a drawer or safe deposit box when not being used.
Don’t Share Your PIN or Seed Phrase
As soon as your hardware wallet connects with either a computer or smartphone, it will prompt you to set it up by creating new private keys and creating an unshareable PIN or seed phrase. Remembering not to share these with anyone could allow them to regenerate it on another device and take full control over all your cryptocurrencies.
As part of setting up your wallet, a recovery seed phrase (usually 12-24 words from BIP39 word list) will be generated to help recover your wallet if ever lost or stolen. Therefore, it is recommended that this seed phrase be written down and stored safely offline.
Before sending cryptocurrency from your wallet, it is vital to double-check that recipient addresses are correct on their screen before confirming. Malware on your computer could alter addresses copied into your clipboard; so always double-check before sending.
Keep Your Hardware Wallet in a Safe Place
Hardware wallets must be stored safely to protect them from theft and other physical vulnerabilities, which is best accomplished with storage in a safe or safety deposit box. They should also be safeguarded against malware attacks which could compromise them or their private keys.
As part of its setup process, hardware wallets usually generate and display a recovery phrase using 12-24 words from BIP39 word list as its seed phrase. This recovery phrase should be remembered carefully in case your wallet is lost or stolen and used to restore it on another device or recover any cryptocurrency stored inside.
Hardware wallets provide an effective and straightforward method of safeguarding crypto assets. To be safe, it is best to source one from a reputable manufacturer and follow best security practices when buying it. Offline storage (cold storage) helps reduce cyber threat risks as well as many of the associated exchange risks such as insolvency or hacking.