In this post I will describe How to secure a hardware wallet. The best way to protect your crypto asset is to use a hardware wallet. However you need to be careful: where to buy a hardware wallet, how to setup, how to make backup, how to use it, how to add additional security layer, what you should avoid, about potential risks. Keep reading and I will give you all important tips about hardware wallets.
Where to buy a hardware wallet?
My advice is to buy it at the official Ledger web shop. You should avoid sellers on the web shops such as Amazon, Ebay or some local stores. Reason is that you can not be sure how this sellers are trusted or not, will you receive an original hardware wallet or some fake item. In case that you are unable to buy Ledger hardware wallet online you need to be more careful when you will use a hardware wallet for the first time. On set up you can check is your hardware wallet genuine. Payment methods are: VISA, PayPal and cryptocurrencies. To be able to check is your hardware wallet genuine you need to download an official Ledger crypto wallet – Ledger Live. Useful links (Ledger web shop, Ledger Live download section) you can find inside my post How to use a hardware wallet. Inside the same post you can see how to set up a hardware wallet but I will repeat basic things in the next section.
How to set up a Ledger hardware wallet?
Before you start with set up I recommend to check the box contents. What you should receive is described on the official Ledger website. Next step is to power on your Ledger hardware wallet. Ledger Nano X do not require external power because there is integrated battery. Ledger Nano S require external power because there is no integrated battery. When you turn on hardware wallet for the first time you should see Welcome to Ledger screen. You need to set up as new device. If there is no Welcome to Ledger screen and if you will be asked for PIN code that means hardware wallet is already used and you should not use this device. You need to set up a new PIN code and seed (backup phrase). I recommend to set up 8 digit PIN and 24 words seed for backup. For advanced users I recommend additional security layer by adding one more word (25 word seed) but about this I will give you information later inside this post. Remember that who have access to your seed will have access to your crypto. Also in case that you lose hardware wallet or in case any technical issues seed (backup phrase) is only way to get back access to your crypto. Full tutorial you can find inside my post mentioned above.
After you have checked the box contents, done with PIN code and backup setup (24 word seed) you are ready for next step. Be sure that you wrote down backup (24 word phrase) and store it on the safe place where only you have access. Sometimes this is hard to do because some other people could find your hardware wallet backup. In that case read carefully next section about 25 word backup. But before adding this extra security layer I recommend to use a hardware wallet protected with 24 word seed to see how it works. For every case be sure that you are away from any camera including web camera integrated in laptops (while you are write down these important 24 words). Next step is to install an official Ledger wallet – Ledger Live.
When you have Ledger Live installed and connect hardware wallet for the first time there is a genuine check and on this way you can be sure that you have an original Ledger hardware wallet. Also every time when you use applications inside hardware wallet Ledger Live will check is app a legit. After this step you are ready to create accounts for different cryptocurrencies such as Bitcoin, Ether, LiteCoin, Matic, Solana, Luna etc.
How to create accounts inside Ledger Live?
To be able to create an account you first need to find application inside Ledger Live, install it on the hardware wallet and then synchronize account with application. This step is required for every single cryptocurrency. When you want to see deposit address or to send to other crypto address you need to verify on your hardware wallet screen.
More information you can find inside my already mentioned blog post How to use a hardware wallet or on the official Ledger website. Some cryptocurrencies are not supported by Ledger Live directly. That means you need to install app on your hardware wallet but you are not able to create account inside Ledger Live. You need to download some external wallet to your PC or mobile phone and then connect it to your hardware wallet. To be sure how to do that make your own research and check information on the official Ledger website mentioned in this section.
The most important: never share your backup phrase (seed) to anyone. Ledger will never ask you this, never store it online, do not type it on your PC or any other device. Only write down on paper, keep it on safe place. When you want to make recovery only input recovery phrase on your Ledger hardware wallet directly. Be aware there are phishing attempts via emails, do not interact with these scammers.
How to set up an additional security level (25 word seed)
Advanced users can add one more word to backup phrase (seed). This is extra security level because now your crypto assets are protected with 24 words plus one more word. That means accounts created inside special mode (passphrase set up) will be protected with 25 words. If some person on some way get access to your 24 word seed or PIN code – access will have only to accounts created in normal mode. Accounts created inside special mode (temporary passphrase) will not be available.
You need to choose: Settings – Security – Passphrase – Set temporary. Temporary means when you power of or disconnect your hardware wallet you will be again in normal mode outside of 25 word seed. While you are inside Temporary passphrase mode all accounts created will be protected with this one additional word. To get access again to this secret mode and accounts created in this mode you will need to set up again Temporary passphrase with the same word. This 25th word can be up to 100 letters and special characters. I recommend to choose some word that means for you something. More information you can find inside my post The best protection for crypto assets. You can also choose Attach to PIN option – on this way you can get faster access without needs to enter 25th word – you will need only to enter this secondary PIN.
Remember: if you ever lose access or do not remember this 25th word you will lose access to accounts synchronized in secret mode (temporary passphrase). If you forget secondary PIN, this is not an issue, you can get access by entering 25th word seed.
Always be sure to stay away from any potential camera and no one can see what are you doing, just like while you are making 24 word passphrase (seed) backup.
Hardware wallet risks
If you follow security tips mentioned in this post risks are minimal. But I will warn you how to avoid any potential risks. Always check that you see the same address inside Ledger Live and on your hardware wallet screen. Do not hurry ever! Especially if you are beginner I recommend to make first transaction with some smaller amount firstly to see is everything as should be. This is also recommended when you see any suspicion or you interact with some new site, crypto exchange service etc. For any doubts make your own research, read carefully articles inside Ledger official website.
Serious risk could be if you have interaction with smart contracts. There are smart contract scams and you could lose significant crypto amount if you are not careful. The most popular wallet that have support for smart contracts and decentralized applications is MetaMask. You need to be carefully about giving permissions to your wallet. Even if you are using MetaMask protected with hardware wallet your crypto assets could be on risk. Be carefully with platforms and websites that you interact with. Also you can limit access to your Metamask wallet. Creating several different accounts is a good way to increase protection which I described inside my post How to protect MetaMask wallet. Sometimes problem might be about fees inside some blockchains such as Ethereum or other problems with wallets especially with MetaMask. Usually you just need to open wallet again but sometimes recovery is required. Always be sure to have a backup and connected with hardware wallet. Some tips about problems with MetaMask transactions you can find inside my post How to fix MetaMask transaction problem.
Crypto is very popular, this is a new technology but as always there are scammers – they see this as opportunity to steal crypto from people. We need to be very carefully. Hardware wallet is the most secure way to store and use crypto. I have 2 devices: Ledger Nano S and Nano X. Nano X review will be in some my future posts. I have never had any issues with Ledger hardware wallets, more than 3 years. I want to share my experience with others. Always make your own research and be careful with new platforms. Remember: not your keys not your crypto. Always have crypto assets protected with hardware wallet. Crypto exchange platforms, lending platforms, crypto farms and DeFi in general are on risk. You should know that crypto you have there is also on risk. I hope this post is useful for you. If you have any doubts, questions or suggestions feel free to place a comment.