Storing your coins on a hardware wallet like a Ledger Nano S or a Trezor is a very secure way of holding your cryptocurrencies… But this could go wrong as well... Before I talk about that, I will talk a little bit about how those private keys are generated on a hardware wallet:
The first time you use your hardware wallet, it will generate 24 words in a specific order (a so called ‘BIP39 SEED’). Make sure to write these words down on the recovery sheet (which you got with your hardware wallet)!
Next, if you use your hardware wallet to open a wallet of a certain coin, your hardware wallet will generate a private key for that specific coin, out of your 24 words. This private key will never leave your hardware wallet so you don’t have to worry for a possibility of an exposure of your private key(s).
In the case that you would lose your hardware wallet, all you need to do is enter those 24 words in another hardware wallet or enter them in a software wallet and you could aces your coins again (any other wallet that supports BIP39).
Your hardware wallet is secured with a numeric pin code (4 to 8 numbers) which you have to choose while you set up your hardware wallet. As soon as someone tries to guess this code and he or she is wrong 3 times, the device will reset itself and you have to enter those 24 words again to have aces to your funds again.
Sounds very secure, right?
But… This could go wrong to… Remember I said you had to write down these 24 words on the recovery sheet? Well… Imagine what will happen if…
- A burglar breaks into your house and steals your recovery seed
- Someone took a picture of your recovery seed
- Your house sets on fire with your hardware wallet and your recovery seed in it
- A flooding or a water leak breaks your hardware wallet and makes your recovery seed unreadable
Right! You’ll lose aces to your coins!
But there is something you could do to avoid all of this risk…
And the only thing you need is… Your brain! All of us (at least, most of us) have a brain, which is a very powerful part of our body! And memorizing something is quiet easy, for sure if you keep on repeating the things you want to remember!! Like the 24 words generated by your hardware wallet!
How did I do it?
I did write down the first twelve words in groups of 3 words on a little note and took that little paper with me all the time. When I was sitting on the toilet, while I was vaping outside, before I did go to sleep, … I constantly repeated those words in my head…
Make sure nobody can see it, or nobody can hear you while practicing! When I was sure I know those first twelve words I burnt the paper and I wrote down the other 12 words and did the same. (Never write down all of the 24 words on one note that you take with you, in case you lose it, someone will have aces to your funds!)
After burning the second paper I repeated those 24 words in the right order and I checked or I got them right by looking at the recovery sheet. When I was sure I did remember those 24 words in the correct order, I did burn the recovery sheet to…
Now these words are only in my mind!
Some tips, tricks, important notes:
- NEVER type your 24 words on a device (computer, laptop, mobile phone)
- Make sure you don’t lose your practicing note
- Make sure nobody can hear you while practicing
- Make sure nobody could see the note while practicing
- You could add 1 dollar worth of Litecoin (for example) on your Ledger Nano S, reset your device, enter the 24 words and see if your 1 dollar worth of Litecoin is still on it (in this way you are sure you know the 24 words correctly) before adding more coins on it
- Practice long enough! I did it during 1 month, every day, before burning the recovery sheet.
- Someone you trust could remember those 24 words to, practicing together could be fun!
- You could still hold a security sheet if you want, and use this 24 memorized words as an extra back-up
- Link to the BIP39 Dictionary: https://github.com/bitcoin/bips/blob/master/bip-0039/english.txt
On this moment Ledger nano S supports the following coins:
- Bitcoin
- Bitcoin Cash
- Ethereum
- All of the ERC20-tokens
- Ethereum Classic
- Stratis
- Ark
- Litecoin
- Dash
- Komodo
- POSWALLET
- Dogecoin
- Ripple
- Zcash
- PIVX
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