Hard wallet? How it works and how to secure it
If you are getting involved with crypto currencies lately and you have adquired funds or any other digital asset, we invite you to consider the following information.
One of the first things that you may have learnt is that is convenient to have a hard wallet. So, what is a hard wallet, and what can it do for you? Well, good question.
Even though, NFTs and cryptocurrency transactions take place online, a hard wallet gives you access to your cryptos, NFTs and smart contracts through a physical device. The key point here is that it is a physical device, like a USB, for example, and that is kept offline. That’s why is called hard wallet, from hardware wallet.
Their features are:
- They allow us to access, safely and efficiently, to our funds and crypto assets.
- It has no online connection to the Internet or blockchain, so it’s safe from malware and other maliciuos software.
- They have the capacity of generating a password and a seed phrase needed to operate the device. This avoids a third party to operate your passwords. Some of them even let you put a password to access the hard wallet.
- They are compatible with the majority of the operating systems available in the market right now.
What is a seed phrase?
A seed phrase, also known as seed recovery phrase or backup seed phrase, is a list of words generated randomly by your unique hard wallet device to secure and recover your funds in cryptocurrencies. Normally it’s a sequence of 12 to 24 words that must be kept securely.
We strongly recommend not having a digital copy of them. This means no photos made by your smartphone or tablet, or no digital copies in your computer. On the contrary, we suggest having a hand written copy of these words made in the physical sheet. Of course this should be kept in a safe place where it can’t be destroyed or misplaced, and also separated from the actual device.
Should anyone ask for my seed phrase or password?
No. By no means you should lend, give or share your seed phrase with no one online, ever. As crypto currencies and NFTs get more popular, scams do too. So, as Gary Vee has told on Discord recently to its followers no one “will ever ask you for your seed phrase”.
What happens if I loose my hard wallet or my seed phrase?
Well, we really encourage you to keep your hard wallet in a secure place, as well as your seed phrase. These two items are pretty unique. So if you misplace, loose or someone stoles one of them or both, there are things you may need to know.
In case you loose or missplace your hard wallet, but you still keep your seed phrase, you can buy another hard wallet and recover the access to your funds through your old seed phrase.
In the other hand, if you ever loose your seed phrase but you have your hard wallet, you can still revover access to your funds. In this case you should first transfer your funds from your hard wallet to a hot wallet where you have a blockchain account.
A hot wallet, by the way, is an online, third party wallet, like Metamask, for example. There you can transfer the funds while making a reset of your hard wallet. After reseting, the hard wallet will generate a new seed phrase. At this point you can retransfer the funds back. This operation has a risk, which is that meanwhile you make the reset, your funds are online and so, exposed to posible malware.
And there is a third outcome, if you ever loose both your hard wallet and seed phrase, we are sorry to say there is no way you can access your funds. This is because there is no other copy of the seed phrase out there. The hard wallet brands don’t keep a backup copy of them. This is actually why this system is so safe, but it only relies on you.
This is as tough, as true. But don’t loose hope, you just have to have something very clear in your mind; both the hard wallet and your seed phrase are just your charm, keep them safe!