I’d heard from quite a few sources that hardware wallets are the way forward in terms of proper security for your coins.
These are a form of cold storage, as opposed to hot storage. Hot storage is anything where your private keys are connected to the internet or your computer.
Cold storage is what you want for any large holdings of Bitcoin and other supported coins. Large is whatever amount you would feel sick losing. In my previous post, we saw how a guy lost USD 12,000 of Bitcoin (BTC) and Bitcoin Cash (BCH) on his Exodus wallet. This is a lovely looking wallet but it is a hot wallet. You shouldn’t really have that much on there, or any other hot wallet for that matter.
So in the world of hardware wallets, there are three main options:
Keepkey looks great but less durable in case of dropping it. Currently USD 99.
Ledger Nano S is the cheapest at EUR 69.
Trezor is around EUR 89.
So they’re all roughly the same price and I will try them all out at some point.
For now, I went with a Trezor. I bought one off Amazon.
Unboxing the Trezor wallet
This is what it looks:
It’s important to get some information on how to set it up properly. I highly recommend the Trezor set up videos from CoinSutra – seriously useful! I’ve listed the 3 videos below:
Setting it up does take some time. You want to make sure that you get it right, so you don’t want to rush this step.
The most important thing to write down your recovery seed of 24 words.
Write these 24 words down very carefully. DO NOT RUSH!
Once you’ve set up your Trezor wallet, I highly recommend that you don’t transfer Bitcoins into it yet.
Make sure that you can recover your wallet first.
To start this process, watch the video below from Coinsutra about how to wipe your Trezor wallet first.
Now that you’ve wiped your Trezor wallet, watch the next video by Coinsutra to go through the recovery process. You’ve basically now got a new wallet. You’re trying to restore the wallet you just created on a now wiped Trezor wallet.
IMPORTANT: DO NOT SKIP THIS STEP
Practising recovery is ESSENTIAL. You don’t want to have Bitcoins on your wallet and not be able to know that you can recover this wallet in case of loss.
You want to know that you wrote down the recovery seed properly.
You want to have the peace of mind that it all works before committing Bitcoins and other coins to it.
It’s so easy to skip because you just want to get on with the exciting stuff but please do not rush and skip this.
As a cautionary note, I failed to recover my wallet twice in four attempts. It’s easy to rush and get things wrong.
But I got there in the end. And now I have a Trezor hardware wallet!
I do feel it’s a bit more secure than having a wallet on my desktop. I suppose only because I trust that this is a more secure storage system, because everyone in the community says so. There’s an element of trust here but sometimes you do have to do your own research and make a judgement based on risk and reward.
Finally, like I said in my last post, do not put all your eggs in one basket. Only put what you’d be comfortable losing onto your hardware wallet.
As your holdings grow, you will need additional hardware wallets for peace of mind.
Improvements I would make to the Trezor experience
I would make the USB cable that comes with it longer. It’s only about 5 inches and isn’t that useful as it’s got to be connected to your computer the whole time. Whilst it’s connected, you have to hold it in one hand to see what’s going on on the screen. If it was 12 inches, that would be much more user-friendly.
More recovery seed cards
These are really useful actually. They have numbers and lines and make your recording of your recovery seeds nice and neat and easy to refer to. Better than a piece of paper. You get two in the pack as default. I wanted to make two copies of the seed but I messed up copying the second. Doh. Three or four as default would be perfect.
Let me know your experiences with hardware wallets like Trezor are in the comments below! Any questions too!