As you know, if you don’t have your private keys, you don’t have your bitcoins (Not your keys, Not your coins). What if you lose your Ledger (or other hardware wallet)? Some have already lost cryptos on exchanges such as Celsius, Voyager or even FTX, again painfully demonstrating that holding your private keys is essential. Far from being discouraged in your desperate quest for financial independence, you have ended up acquiring a cold wallet, because we promise, you won’t be caught again. But now, a disaster never happens alone and you have lost your wallet, the dog has sunk its fangs into it or your child has stolen it to play with in his bath… Don’t panic! Your bitcoins are safe! (and always yours)
Bitcoins are not stored on a cold wallet
It’s true, we talk about cold storage or hot storage. In reality, bitcoins and cryptocurrencies are not stored on a wallet. They are still on their respective blockchain. The only important things stored on your wallet are the 12 or 24 words (see more). The only thing that matters are your private keys. The seed: recovery words are the keys to accessing your cryptos, regardless (or almost) of the medium. If you lose the medium (hardware wallet, smartphone, tablet or PC), itself protected at least by a pin code, then you have not lost your funds. Let’s review the potential vulnerabilities of your seeds.
The loss of the seed is equivalent to the irretrievable loss of your bitcoins (BTC)
You are your own crypto-banker when you have your keys. With bitcoin, there is no bank to block your account, but no customer service either. The words of your seed are therefore precious, they are the ones you must pamper and secure. It is the seed that is vulnerable to attacks, so you have to hide it, protect it from the weather, not expose it online (at least as little as possible).
How to secure your seed?
- Weather protection.
For good durability, you can opt for metalwallets. Remember, however, that some burglars are equipped with metal detectors! The stone is perhaps also a good support? Think not only of water damage or fire. Paper is therefore not always a very good option, for example.
- Protection against hacking and theft
– Do not expose your seed online (unless you know how to encrypt your data): no photo of your key on your connected smartphone, no SD card connected directly to your PC, no backup in a cloud. If you want to jot down your hot wallet words on a sheet, turn on airplane mode during the process.
– Never give your recovery words to a stranger (someone who promises you a fabulous airdrop or claims to want to help you with a manipulation, etc.)
– Don’t download a suspicious app. The best is to go to the supplier’s site and check the link (link) with VirusTotal for instance.
Which wallet to choose?
Several scenarios:
- You have very few bitcoins that you want to use to make purchases: a wallet on your smartphone will be practical (or better a smartphone only intended for this purpose)
- You want to “hodler”, i.e. keep your bitcoins for the long term, or even accumulate them: in this case a Ledger, Trezor or Bitbox type wallet is a good option, even if it is the preservation of the 24 words that remains essential. There are many models of hardware wallet: what matters in your purchase is, in addition to the price, the ease of use and its functionalities. Does it have a C port to work with a smartphone? Is the screen right for you? Is it robust? Is it open source?)
- You have a lot of bitcoins: in this case, it seems wise to spread your funds. On some wallet models, you can create several seeds. In this case, it is not useful to obtain several hard wallets, on the other hand several seed supports will be useful to you (such as a Zeus style metal wallet from Cryptotag) or other supports.
Compatibility between wallets
Today most wallets use the same open-source protocol to generate the private key. Beep39 is a series of 2048 words in English each corresponding to a number and whose list can be found here. This compatibility is very practical and, but perhaps a source of vulnerability if you switch from a hot wallet to a cold wallet.
Convenient :
Do you want to change your hardware wallet because yours is broken or the model does not suit you? Go from a Ledger to a Bitbox, from a Trezor to a Ledger without any difficulty thanks to your 24 words. PIN code: the pin code (which you choose) is specific to each device. Forgetting it is quite annoying (several wrong attempts and the device will be blocked), but it will not prevent you from finding your funds on another device.
Do you want to switch to a wallet that works with only 12 words? No problem there either, if you restore a wallet, you can easily do it with 24 words.
Risks:
If you switch from a hot wallet to a cold wallet, nothing will save your bitcoins if the hot wallet has been compromised at some point (if your 12 words have been intercepted). Hackers can be as quick as they are patient, they will know how to wait until you have “filled” your wallet to “empty” it. Some investors have their bitcoins skyrocket several months after purchasing or installing a compromised wallet.
Can I find a random wallet then?
In theory yes. But the number of combinations is so high (24 words from a list of 2048) that you have a better chance of winning the lottery. Matching 6 lotto numbers is 1074 times more likely than finding an existing bitcoin wallet by choosing random words.
Having bitcoins requires a minimum of caution and certain precautions. The main one, you will have understood, is to note the 12 or 24 words of the seed in order. Then check your note taking. The next step is to think about how to keep this seed: both accessible (possibly think of your heirs), but protected from bad weather and thieves. Be creative and think about what will be most convenient for you. Buy your equipment only from the official supplier or an authorized reseller. Of course, you can also deposit your seed in a safe at the bank, however, it is a bit contrary to the idea of keeping your funds yourself. Your notary can also keep the seed in his safe (for a fee).
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