Hardware Wallet User Guide - How to Safely Store Your Digital Assets | Worth Repeated Study and Collection

Safety is the most important and only bottom line in our field; this article provides an in-depth interpretation of this final bottom line, including:

1) What is a hardware wallet? How much security do I actually gain when I put my assets into a hardware wallet?

2) Is a hardware wallet safer, or is multi-signature security better? What is the safest way to store assets?

3) Which hardware wallets on the market are safer and easier to use?

4) Ultimate security advice for hardware wallets

Recently, I helped a friend successfully unlock a hardware wallet that had been inaccessible for years, and with the recent incidents of prominent figures falling victim to phishing attacks and asset theft;

This has heightened my focus and research on asset storage and security;

Safety is the most important and only bottom line in our field; safety is 1, and everything else is 0s behind it; because if safety is not well managed, no matter how much money you make, it could all vanish one day;

So how to store your assets (here I mainly refer to BTC assets) is summarized below after discussions with several experts in the wallet field;

Special thanks to @KeystoneWallet Head of Product @bc1Bill; and several other friends who prefer to remain anonymous;

1️⃣ What is a hardware wallet? How much security do I actually gain when I put my assets into a hardware wallet?

I believe this is the most concerning question for all friends using hardware wallets, but in reality, most people do not have a good understanding of this.

There is a common misconception; after asking around, I found that many people think that once assets enter a hardware wallet, they are absolutely safe and can rest easy;

In fact, this is not the case; a hardware wallet does not equal absolute safety!

First, you need to understand the essence of a hardware wallet; it is a physical device used to store cryptocurrencies and other digital assets.

To put it simply—

You can think of it as your safe; your wallet password is the safe's password;

The private key is the ultimate tool for recovering this asset if your safe is lost;

Therefore, the main purpose of a hardware wallet is to provide high-level security, protecting users' private keys and sensitive data from threats such as network attacks, malware, or physical theft. It generally has the following features:

1) Enhanced Security:

Hardware wallets typically contain a secure chip or multiple chips specifically designed to protect the security of private keys. The private key never leaves the device unless the user explicitly authorizes a transaction.

2) Offline Storage:

These wallets usually operate in an offline state, significantly reducing the risk of attacks that could occur over the internet. The wallet only connects to the network when a transaction is needed.

3) User Control: Unlike online wallets or trading platforms, hardware wallets allow users complete control over their private keys and funds. This aligns with the cryptocurrency community's principle of "owning your private keys means owning your wealth."

So overall, hardware wallets provide a higher level of security compared to software hot wallets, exchanges, or online wallets, but this does not mean that other security measures are unnecessary.

For example, in terms of asset storage, your private key does not touch the internet, so the security is relatively higher. In terms of signing, hardware wallets require more steps, so you may be better able to identify scams;

However, if your fundamental issue is your security habits and usage patterns—if you scatter your private keys everywhere and never check the signing content while blindly clicking—then your security level has nothing to do with whether you use a hardware wallet; you are in an insecure state.

So to put it simply, when you put assets into a hardware wallet, how much security you actually gain depends on your usage habits, not the hardware wallet itself;

2️⃣ Is a hardware wallet safer, or is multi-signature security better? What is the safest way to store assets?

First, as mentioned earlier, our hardware wallet is a safe, the password is the key, and the private key is the ultimate recovery tool. To protect our assets, we need to:

1) Protect my private key (the ultimate tool)

2) Protect my safe

3) Protect my safe password

The core here is still the private key; whether it is a hardware or software wallet, the most critical aspect is your private key mnemonic phrase. The security of how you store the mnemonic phrase determines your ultimate security; you need to understand this;

At the same time, your safe is also very important, whether this safe is a phone, bank app, hardware wallet, or software wallet; you need to protect the safe;

However, many people overlook this point, thinking that losing the safe (hardware wallet) is not a big deal. We have helped crack a dozen wallets, and in reality, the possibility and success rate of cracking a hardware wallet are there. Imagine a scenario where I am an acquaintance of yours; I know where your hardware wallet is, and I know your common password habits. Once I take your hardware wallet (safe) and crack it, you are actually in great danger;

Let me state the conclusion first; after discussing with several experts, everyone unanimously agrees that if safety is to be taken to the extreme, the safest option is a hardware wallet + multi-signature;

If you want to be even more extreme, use different brands of hardware wallets + multi-signature;

For example, a combination of Ledger, Trezor, Bitbox, Keystone, Coldcard—Ledger + Keystone + Trezor; you can create a 2/3 or 3/3 multi-signature;

This method requires three hardware devices + three private keys to store assets; if you store these three in different locations properly, it is very difficult for others to access them simultaneously; the possibility of theft is minimized;

Other methods, such as the shard mnemonic feature launched by @KeystoneWallet, are also worth researching; I think the security is great. It divides the mnemonic into multiple parts, and each part cannot restore the wallet individually; only when these parts are correctly combined can the wallet be rebuilt.

This is equivalent to a wallet completing multi-signature:

https://mirror.xyz/keystonecn.eth/jngKwNznJARo5PdAlYxzuibDT9DWyvDkkSMpgjsBwQM

3️⃣ Which hardware wallets on the market are safer and easier to use?

This is also a point of concern for everyone, but as I said: there is no device or system that is forever safe because human vulnerabilities are unpredictable;

So here, opinions may vary; currently, among the experts in cracking technology, the cases we have cracked include: Trezor, Onekey, Coldlar, Imtoken mobile, Bitcoin wallet.dat;

Ledger is considered the largest brand in the industry, and its updates and security are among the best, but the Ledger system is closed-source, so no one has claimed to have cracked Ledger's password system; but the problem lies in its closed-source nature; with a non-open-source system, you will always fear the possibility of internal malfeasance;

I have used Onekey and Coldlar for a while; they have strong marketing, but due to the frequency of hardware cracking incidents, their hardware and software development capabilities still need market validation, so I ultimately did not use them as standalone wallets but rather for multi-signature;

To test, I purchased some hardware, and in the coming period, I will conduct a series of hardware wallet tests and tutorials for everyone, hoping to help myself understand wallets while also assisting others; you can look forward to it!

4️⃣ Ultimate Security Advice for Hardware Wallets

Regarding security, here are some suggestions for everyone:

1) No matter what safe (hardware wallet device) you use, do not let anyone know where your safe is;

2) Do not let anyone know your safe (hardware wallet) password; whether this safe is a phone, bank app, hardware wallet, or software wallet;

3) Try to choose hardware wallets with secure chips that can protect against physical attacks: some high-end hardware wallets may also have tamper-proof features that can automatically destroy private keys or prevent transactions when a physical attack is detected.

4) Most importantly, do not let anyone know where you store your private keys; either use multi-signature storage or encrypt your private keys again;

In summary: safety is no small matter; do not be afraid of trouble;

Finally, let me reiterate: there is no device or system that is forever safe because human vulnerabilities are unpredictable; you need to deeply understand the meaning of this statement;

I hope everyone can safely store their assets and never lose them;

Of course, if you really lose your password and have no way out, you can message me; I might be able to help!

For the full article, please see: https://link.medium.com/291jvazrJNb

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