How To Proactively Keep Your Crypto Hardware Wallet Safe
Crypto hardware cold wallets are one of the best ways to keep your cryptocurrencies and crypto assets safe.
But crypto hardware wallets are not immune to scams, robberies, or accidents.
Learn how to keep your Crypto Hardware Wallet safe by increasing your DIGITAL SAFETY KNOWLEDGE and following DIGITAL SAFETY GOOD PRACTICES.
On this page, you are going to:
– Test your hardware wallet safety knowledge
– Review the safety knowledge and good practices that will keep your crypto hardware wallets safe
Table of Contents
Important notice: Do your research.
Our content is intended to be used and must be used for informational purposes only. It is not intended to provide investment, financial, accounting, legal, tax, or other professional advice.
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Hardware Wallet Safety and Good Practices Quiz
Crypto Hardware Wallet Safety 101
Hardware wallets technology reduces the exposure to risks and threats, which makes them safer than other wallets:
– The private keys are stored offline, vastly reducing the risk of vulnerabilities, e.g., computer or mobile phone hacking.
– The owner has custody over the private keys, which removes the exposure to intermediaries, e.g., crypto assets blocked due to an insolvent crypto exchange.
But even hardware wallets technology cannot prevent situations like:
– The owners are falling for a phishing scam and giving the wallet seed phrase away (lack of knowledge).
– Or the owner is installing malicious software that results in compromised accounts (lack of knowledge and good practices).
– Or the owners losing both the hardware wallet and seed phrase to an accident like a house fire (lack of good practices).
And this is why your need to apply DIGITAL SAFETY GOOD PRACTICES and to increase your DIGITAL SAFETY KNOWLEDGE
Digital Safety Good Practices
Digital safety good practices are guidelines and habits that help keep individuals and organizations safe online.
These include things like using strong passwords, avoiding suspicious links and downloads, backing up important data, and being careful about sharing personal information online.
By following these practices, you can protect yourself from cyber attacks and other digital risks.
Buy Your Hardware Wallet Only From Trusted Vendors.
– Good practice –
Always buy your hardware wallet directly from the manufacturer, or from a trusted and verified distributor.
If you buy a hardware wallet from a secondary market, you may risk buying an item modified by a person or organization aiming to steal your assets.
The example below is clearly a fake, but some other fakes are much more challenging to spot.
– Good practice –
Once you have received your hardware wallet, check for manipulation signs.
It is improbable, but possible that someone may have manipulated the wallet while in transit from the manufacturer to your residency.
Even if you have bought a hardware wallet from a trusted vendor, you must check for signs of alterations once you receive it.
If the package looks opened or you see anything suspicious, do not use the device and contact the seller immediately.
Keep Your Hardware Wallet Secret.
– Good practice –
You want to ensure that only a few trusted people know that you own crypto assets or a hardware wallet.
As soon as it becomes public that you have crypto or a hardware wallet, the information will eventually pass from mouth to mouth.
Keep your hardware wallet secret:
– Do not brag about being a cryptocurrency investor. E.g., please do not speak about crypto to your neighbors; write about it in an online forum or on social media without first taking precautions.
– Unless you trust a person 100%, do not tell anyone where you store your hardware wallets.
Keep Your Hardware Wallet Safe
– Good practice –
While not in use, store your hardware wallet in a safe location:
– The location is concealed because secrecy is the first layer of protection.
– The location can be locked to prevent unwanted access.
– The location can resist a break attempt.
– The location is unmovable, so it cannot be moved away or thrown away by mistake.
– The location must be sturdy enough to protect the wallet from accidents like fire or flooding.
Home Safe Box
Always Have a Secure and Proven Recovery Method.
A hardware wallet does not store crypto assets. A hardware wallet stores the private keys used to sign the transaction that unlocks the assets stored in the Blockchain.
If the hardware wallet gets damaged beyond repair, stolen, or lost, it is possible to recover the private keys by restoring them using the seed phrase.
– Good practice –
Store the seed phrase in a secure location and, if possible, not in the same location as the hardware wallet.
Keeping your hardware wallet and the seed phrase in the same area is not advisable.
Wallet Seed Phrase
Make sure that you store the seed phrase in a secure location:
– The location must be challenging to find. So someone in a hurry, like a robber, will not have the time to find it.
– The location must be safe, so the seed phrase is difficult to access even if someone finds the location.
– The locations must be unmovable, so the seed phrase cannot be thrown away by accident (e.g., because the seed phrase is stored in the back of a painting or inside a hollow book).
It would be best if you recorded the see phrase in such a way that sudden or over-time degradation cannot happen:
– Even if you store the seed phrase in a safe location, fire and water may lead to sudden destruction. Ideally, keep the seed phrase in a water and fire-proof secure place.
– Most people write the seed phrases on paper, but this method does lead to degradation over time or even destroyed by fire or water. A good quality stainless metal steel is a very safe way to record a seed phrase.
Seed phrase storage
Digital Safety Knowledge
Digital safety knowledge refers to the understanding and awareness of the potential risks and threats that exist in the digital world.
It includes knowledge of common online scams, identity theft, and other online dangers.
Having digital safety knowledge also involves knowing how to use digital tools and platforms in a safe and responsible manner.
Learn How to Protect Your Wallet from Phishing scams
– Knowledge –
A scammer’s ideal target is someone who knows little or nothing about phishing.
Learn now how to protect your most valuable assets from phishing scams.
Crypto phishing attacks have become more and more frequent because they just require a computer and social skills.
If you learn about the different types of phishing attacks, you will be prepared to identify them and avoid falling into a trap.
Always use Unique and Strong Passwords
– Knowledge –
Always use strong passwords to protect your accounts
But be aware that in case of a data breach, a strong password used for all your accounts becomes a single point of failure.
It is important to use unique and strong passwords because they help protect your personal and sensitive information from being accessed by unauthorized individuals.
A unique password means that you use a different password for each account or service you have, rather than reusing the same password across multiple platforms. This ensures that if one of your passwords is compromised, your other accounts remain secure.
A strong password contains a mix of upper and lower case letters, numbers, and symbols, and is difficult for others to guess. This reduces the likelihood of your password being cracked through brute force attacks or other methods.
Unique and Strong passwords
Crypto Hardware Wallet Horror Stories
Many crypto users think that crypto hacks, scams, and accidents only happen to other people.
The following stories are cases reported by real people who unfortunately lost their assets because they lacked digital safety knowledge or didn’t follow digital safety good practices.
We cannot go back in time and prevent their financial loss, but we can learn from the same situations, so they do not happen to us.
Hardware Wallet and Seed Phrase Lost in a Fire Accident.
This person will NOT get the coins back.
No wallet and no seed phrase equal to a permanent loss.
Most people store the hardware wallet, and the see phrase under the same apartment, house, or building.
And while fire accidents are not that common nowadays, if one is to happen in your residency, this will most probably lead to the destruction of your hardware wallet and seed phrase.
The way to prevent such a disaster would be to use fireproof storage for your seed phrase or record the seed phrase on a fireproof sheet of metal or similar.
Hardware Wallet Crushed During an Earthquake.
This is another example of a person losing a hardware wallet to a natural disaster.
The way to prevent such a disaster would be to use a sturdy storage place, e.g., a safe box, for your hardware wallet and seed phrase, or record the seed phrase on a metal sheet or similar.is
A Phishing App Requests the Seed Phrase.
Unfortunately, many cases exist of people downloading and installing phishing apps, mostly on their mobile phones.
Once installed, the app requests the user to enter the seed phrase. And once the scammers have the seed phrase, it is a straightforward process to duplicate the wallet, have access to the funds and transfer them to their wallets.
If you want to prevent this kind of disaster from happening to you, you must learn about the methods that hackers and scammers are using to steal cryptocurrencies and crypto assets.
Crypto Hardware Wallet Frequently Asked Questions.
The questions from other people are windows to knowledge that maybe we need, but we never consider we missed.
Are Hardware Wallets Custodial or Non-Custodial Wallets?
Hardware wallets are non-custodial wallets.
The owners of non-custodial wallets possess the private keys that give ownership to the crypto assets stored in the blockchain.
On the contrary, third parties (e.g., cryptocurrency exchanges) create custodial wallets for their users, which means those third parties possess private keys and own the crypto assets.
Not your keys, not your crypto
The ‘not your keys, not your crypto’ is a well-known statement.
This statement means that you need to be the owner of the private keys to own crypto.
If you have your crypto stored on a third-party service, e.g., a crypto exchange, this service will own the private keys and may decide to limit your access or take ownership of your funds or assets.
How Many Bitcoins Can I Store in a Hardware Wallet?
Bitcoins are NOT stored in any wallet, including hardware wallets.
Bitcoins are stored in the bitcoin blockchain.
The private keys are stored in the hardware wallet.
Can I Order a Hardware Wallet, Test It and Return It?
Most probably not.
All reputable hardware vendors will not accept a return unless the box containing the hardware wallet is fully intact.
Once the box containing the hardware wallet is open, there is no assurance that someone could have tampered with the hardware, so the vendors will not accept the return.
Should I Buy a Second-Hand Hardware Wallet?
It would be best if you never bought a second-hand hardware wallet, even if it looks safe, because it is not worth the risk.
There is always the risk that a bad actor has tampered with the hardware wallet and installed malicious hardware or software.
Unless you have no other option, always buy your hardware wallet directly from the manufacturer.
Trezor hardware wallet
Ledger hardware wallet
How Can I Determine if My Hardware Wallet has Been Altered During Shipping?
You may be buying a hardware wallet directly from the manufacturer or a trusted reseller, but this does not mean that at some stage during transport, someone may have altered the product.
Once you receive your hardware wallet, it is a good practice to verify that the product you have received is genuine.
The following video is from Ledger, but they should give you a general idea on what to check for any hardware wallet.
What is an Airgap Hardware Wallet?
All wallets need a connection to an online device to perform transactions, e.g., transfer, buy or sell crypto funds.
– Some hardware wallets are connected via USB cable to the online device.
– Some other hardware wallets are connected via a wireless method to the online device, e.g., Bluetooth.
Those hardware wallets connected via a wireless method are called airgap hardware wallets.
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