Setting up hardware wallets correctly – step-by-step guide

Keeping cryptocurrencies safe is one of the most important tasks for anyone entering the crypto space. A hardware wallet offers maximum security if it is set up correctly. Here you can find out everything you need to know – from choosing the right wallet to the best way to secure your backup.

Choosing the right hardware wallet

Not all hardware wallets are the same. There are significant differences that you should consider when making your decision:

1. Own display:
   The display of your wallet shows your backups (seed phrase) and transactions. It is a central security component as it prevents manipulation by hackers or viruses.
2. Security chip:
   A secure chip protects your private keys from unauthorized access.
3. Open source:
   Open source code ensures transparency and increases trust in the software.

What do you want to do? Your choice also depends on how you use cryptocurrencies:

• DeFi users: If you often work with decentralized applications, you should check which protocols and networks the wallet supports.
• HODLer: Those who only hold cryptocurrencies usually have less specific requirements.
• Which cryptocurrencies are supported by the various manufacturers, please check beforehand whether it is suitable for you.

Order note:
Only order your hardware wallet directly from the manufacturer. Manipulated returns have already been sold on platforms such as Amazon – a major security risk!

Set up the hardware wallet

A hardware wallet is usually set up intuitively using the associated software. Nevertheless, there are some important details to consider:

Store seed phrase (backup) securely

• You will receive a seed phrase consisting of 12 or 24 words. This is the key to your wallet and must be kept absolutely secure.
• Never save online! No photo, no screenshot, no storage in the cloud. Write the words in block letters on the piece of paper provided.
• Secure a long-term backup: Paper is susceptible to damage (e.g. water, fire). It is best to emboss the words in a steel plate or other robust material.
• Number the words! The sequence is crucial. An incorrectly noted backup cannot be restored so easily.

Test correct backup

An untested backup is worthless in an emergency. Test your hardware wallet as follows before you use it properly:

1. Create an address, e.g. for Bitcoin or Ethereum.
2. Send a small amount (e.g. 10 $) to this address.
3. Transfer the amount back to another wallet or your exchange.

Extra security:
After the first test transaction, reset your wallet to the new wallet address and restore it using your backup. Then carry out a transaction to another wallet or your exchange. If this works smoothly, you can be sure that your backup is correct.

Why having your own display is essential

A dedicated display offers two key safety benefits:

1. Display seed phrase securely: The words are displayed directly on the wallet without a hacker being able to intercept them on your computer or smartphone.
2. Check transactions: Before sending a transaction, you can check the destination address.
   • Example: A virus has secretly changed the address in your cache. On the wallet display, you recognize that the transaction would go to the wrong address and can cancel it.

The display thus serves as a trust screen that cannot be tampered with – a must for maximum security.

Important notes on use

• Never pass on seed phrases:
  Whoever has your words has full access to all your cryptocurrencies.
• Seed phrase is universal:
  You can also use the seed phrase to import your wallet addresses into other wallets. However, this should only be done in an emergency, as it poses security risks.
• Create several backups:
  For large sums of money, it is advisable to have several backups and store them in different locations. You can also divide the steel plates into two parts – a single piece is then unusable.
• Cryptocurrencies are not “on” the wallet:
  Your coins are located in the blockchain. The wallet only manages the private keys that enable access.
• Avoid scam sites:
  Never connect your wallet to suspicious sites. If you confirm a fraudulent transaction, your money is irretrievably lost.
• Note networks:
  Make absolutely sure that the sender and receiver networks match. In the worst case scenario, the coins can be irretrievably lost if the network is incorrect.

Recommended hardware wallets

Here are some reliable hardware wallets:

• BitBox02 – Ideal for Bitcoin and easy to use.
  To the BitBox02
• Keystone 3 Pro – Maximum security thanks to air-gapped technology.
  To the Keystone 3 Pro
• OneKey Classic 1S – Flexible and user-friendly.
  About OneKey Classic 1S
• Trezor Safe 3 or 5 – A classic with a strong security concept.
  To the Trezor

Legal notice

This article is for information purposes only and does not constitute investment advice, legal advice or any other professional recommendation. The author accepts no liability for any loss or damage arising directly or indirectly from the use of this information. Please inform yourself independently and, if in doubt, consult an expert before making any decisions regarding cryptocurrencies.