Cold storage? Still Have a Backup..

[Hatchy]

Your report is not bad, but you forgot to add something personally to it. And you know, that's not a good sign. 
What backup method do you use yourself?
I can share my ways: I have two pieces of cryptosteel capsule, and I also have backups in an encrypted Veracrypt container, which is stored in several places.
Come on, it's your turn.

Lol, I got a hardware wallet back then in 2023, Ive got some coins on it too, it's more like a long term for me. My other wallets, aren't cold storage but I have all my keys backed up using paper and pen including that of the hardware. I check them from time to time to make sure it's still intact, though the only thing about paper back up is that over time, it begins to fade off.

[Mia Chloe]

~snip

Hardware wallets are safer than hot wallets but the fact is they still need to be handled with maximum care and precision. The internet can be a nightmare and that is the reason why we sought out as much as possible to take our coins as far away from it as possible. Regardless of your storage time you should always have alternative backups.

If you use a hardware wallet it's a good Idea to also make a paper wallet back up. For your hot wallet too ,same thing applies. One thing I've learnt over the years is no storage method is 100%  safe there's always a loop hole that's why we have to be as careful as possible.

[xandry]

Lol, I got a hardware wallet back then in 2023, Ive got some coins on it too, it's more like a long term for me. My other wallets, aren't cold storage but I have all my keys backed up using paper and pen including that of the hardware. I check them from time to time to make sure it's still intact, though the only thing about paper back up is that over time, it begins to fade off.

Well, thanks for sharing that. I hope that you do not live in a country with a humid climate and your neighbors above have protection from water leaks, because if this is not the case, then your papers are in danger of being damaged by water. 

[JunaidAzizi]

Placing your wallet in a secure place is a big challenge for a person who doesn't know where to put it to protect it from fire, electricity, and water. It is even harder to save its seeds. You can write the seeds on paper, but what if it catches fire and burns, gets damaged by water, or falls into the hands of a child or a person who doesn't know and places it in the dustbin? For me, I think the best place is to bury it near a tree that you can remember and recall whenever you want. This way, it can be safe from any short circuit, fire, and water, as well as from other people. This is the way ancient people used to place their valuable things under the soil's.

[dkbit98]

In my opinion hardware wallets should be renamed to signing devices, but most of the people got used to term hardware wallet.
There are some stateless devices that don't even store any keys on them, and others store them in secure elements, but in both cases it is mandatory to have secure backup.
It's even better to have multiple backups in different locations, and have them encrypted if possible, maybe with something like Satochip Seedkeep cards.

[KiaKia]

~snip

Hardware wallets are safer than hot wallets but the fact is they still need to be handled with maximum care and precision. The internet can be a nightmare and that is the reason why we sought out as much as possible to take our coins as far away from it as possible. Regardless of your storage time you should always have alternative backups.

If you use a hardware wallet it's a good Idea to also make a paper wallet back up. For your hot wallet too ,same thing applies. One thing I've learnt over the years is no storage method is 100%  safe there's always a loop hole that's why we have to be as careful as possible.

Most people are using smartphone today, now tell me how many people are careless with their phones? The numbers are high and that says the same thing with hardware wallets.

Generally some people are careless with everything, hardware wallet can't be locked away and wait for ten years before you come back, because the software needs to be updated regularly.

These updates are mostly security patches and that's  why it's very important to always update the hardware, apart from this some people are just careless, they throw around every gadgets they own like it's a toy, this is is were damages and exposure is likely to occur.

[Lucius]

Cold storage on a newer hard drive has a much longer lifespan than a hardware wallet device, which has an 8-year or shorter lifespan. Like Ledger Nano. I heard that most users had power issues after three years of not using it.

My ledger is exactly 8 years old now. I didn't have power issues as of yet, but screen is dying for the last 6 months or so. Its a perfect excuse to finally move from ledger and finally got something decent but simply can't decide what to buy.

I also have two (S&X) that are already very old, but both still function like the first day, even though they no longer serve their purpose. When I wanted to transfer some alts that I had stored on them (X) I couldn't do it until I upgraded the firmware to the latest version which took a little longer because I was 3 or 4 firmwares behind.

If you need something to store alts, I recommend the latest version of Trezor, and if you want something just for Bitcoin, you can't go wrong with Foundation Passport. You can order both devices at PO Box (tested personally) so you don't have to worry about your personal data being leaked.

[Theupdude]

This written key will likely outlast any electronic device and is the most reliable way to ensure you can always restore your wallet, no matter what happens to the hardware.
Remember, a cold wallet is a great tool for security, but it's only half the solution. The other, arguably more important half, is a secure backup of your seed phrase. Without it, you're just one hardware failure away from a devastating loss. Be smart, stay safe, and always have a backup..

Well, hardware wallets secure against online threats, but not bad luck or time. Too many people assume that cold storage is invincible storage when in fact it's just a piece of hardware that can break like a phone or hard drive. History is riddled with millionaires reduced to a spectator because they forgot to backup their keys, and almost every time the result is the same.
The benefit of Bitcoin is that access is completely in the private key and not the device. If the seed is recorded away safely, then a wallet costing $100 or a $1 piece of paper makes no difference. Despite the fact that paper causes fires, floods, and degrads, Cryptosteel and Billfodl are the most popular metal backups for a reason. Redundancy is very important for long term holders: one safe at home and one safe at a trusted location.

A hardware wallet is not the lone point of survival, but more of a convenience and security tool. The actual security is the seed phrase, which is written or etched in an electronic-independent format. So, forget about that and you're staking your future on silicon and plastic. Honestly this is my personal opinion.

[Antotena]

Well, hardware wallets secure against online threats, but not bad luck or time. Too many people assume that cold storage is invincible storage when in fact it's just a piece of hardware that can break like a phone or hard drive. History is riddled with millionaires reduced to a spectator because they forgot to backup their keys, and almost every time the result is the same.
The benefit of Bitcoin is that access is completely in the private key and not the device. If the seed is recorded away safely, then a wallet costing $100 or a $1 piece of paper makes no difference. Despite the fact that paper causes fires, floods, and degrads, Cryptosteel and Billfodl are the most popular metal backups for a reason. Redundancy is very important for long term holders: one safe at home and one safe at a trusted location.

A hardware wallet is not the lone point of survival, but more of a convenience and security tool. The actual security is the seed phrase, which is written or etched in an electronic-independent format. So, forget about that and you're staking your future on silicon and plastic. Honestly this is my personal opinion.

I don't know how to explain it better for someone with hardware wallet that forgot to back up their wallet. If you know about wallet and you decided to buy hardware wallet instead of software wallet and for some reasons you forgot to back up your wallet then you don't know what you are doing. I don't think there is anyone serious with a hardware wallet that is going to forget to backup unless it's done with no intention of using the wallet they created.

Fragility of hardware wallet should be a problem, what matter most should be your seed phrase. If it's properly backup even if something eventually happen, you will have nothing to worry about. I don't think a serious minded person with a hardware wallet will take his or her wallet around. It's meant to be kept in a safe place at home and not carry around. Any one can rub you off of that wallet or even threaten you to open the wallet with the right encryption.

[Dogedegen]

No hardware wallet that has to be connected online (firmware update, coin app installation...) can be called a cold wallet. What makes Ledger an even worse choice is the recovery feature that allows you to pay $10 a month to have your seed stored by Ledger and two other companies and the possibility that the same seed will be delivered to the authorities if they request it.

You are right, generally people consider hardware wallets as cold storage incorrectly. Still practically speaking it is as close to that as it gets for most people. I don't think having a cold storage wallet for most people is necessary or practicable at all. I think hardware wallets are a good compromise for them.

Another important thing, I think that every seed that stores private keys of significant value should be additionally protected with a passphrase, which of course must be kept separately from the seed.

It is good advice but it is very unlikely that someone is going to randomly guess your 24 word seed phrase.

[Franctoshi]

Some risks of hardware wallet failure

Hardware wallets are praised for their security, but they aren't foolproof. They're physical devices susceptible to a range of risks. Some which includes;

• Physical Damage: Like any electronic device, hardware wallets can be damaged by water, fire, or physical impact. Dropping the device or exposing it to extreme temperatures can render it useless.
• Component Degradation: Electronic components have a limited lifespan. Over time, the internal chips, memory, or battery can degrade, causing the device to malfunction or completely fail.
  
• Firmware Corruption: A device's firmware can become corrupted due to a bad update, a power surge, or other software glitches, making it impossible to access your wallet.
• Loss or Theft: If the device is lost or stolen, and you don't have a backup, your funds are gone forever.

To secure your backup, use a pen and paper or a more durable medium like a metal plate. Store this physical backup in a safe, secure, and private location, such as a fireproof safe, a safety deposit box, or a secure hidden spot in your home.

This written key will likely outlast any electronic device and is the most reliable way to ensure you can always restore your wallet, no matter what happens to the hardware.
Remember, a cold wallet is a great tool for security, but it's only half the solution. The other, arguably more important half, is a secure backup of your seed phrase. Without it, you're just one hardware failure away from a devastating loss. Be smart, stay safe, and always have a backup..

Aside from storing Bitcoin in a hardware wallet, I like the vault storage method, just as the banks do to safeguard people's money and documents in the bank. Therefore, craft your seed phrases on a metal plate, buy a vault box, put them in there, and build or construct an underground safe to hide it in. Then put  the safe box inside the safe, and make it only accessible to you or to your close confidant. This way, you have protected it from fire, rust,theft or any kind of physical damage or easy access.

[Cricktor]

What I'm mostly missing here when emphasis is on analog offline backups (be it on archive grade paper or stamped into metal) is to actually verify that you can recreate your wallet from your backup of your mnemonic recovery words and possibly an optional additional mnemonic passphrase.

I highly recommend to backup some context details like when was the wallet created, for what purpose, which wallet software/hardware was used, derivation path, address type and whatever else would be beneficial to safely restore your wallet.

Practice the restore process, verify the outcome! Too many people think: I have a backup, I'm safe. Unless you've actually verified it, I'd say: you don't have a working backup at all.

Multiple redundant backups are highly recommended, too, in my opinion. Make sure that a compromise of one of your backup locations doesn't yield a total loss (there are multiple ways to achieve this, e.g. protect the mnemonic recovery words with an additional mnemonic passphrase, of course don't store them together at one spot; encryption with e.g. Shamir Secret Shares; multi-sig setups where you distribute the individual signers over different locations; it really depends on what you want to achieve).

Don't over-complicate it, you're likely to shoot yourself in your foot than make your backup strategy more safe.

Document everything related to your backups. You will thank me years later.  

[Dogedegen]

What I'm mostly missing here when emphasis is on analog offline backups (be it on archive grade paper or stamped into metal) is to actually verify that you can recreate your wallet from your backup of your mnemonic recovery words and possibly an optional additional mnemonic passphrase.

While Ledger can be criticized for many things, this is one of the few that they did right. They have an application that you can download with which you can verify that you have the correct seed backed up directly within the wallet. It involves a bit of clicking on the app to get all the words but it is good.

I highly recommend to backup some context details like when was the wallet created, for what purpose, which wallet software/hardware was used, derivation path, address type and whatever else would be beneficial to safely restore your wallet.

For sure. I don't recommend using custom derivation paths every, but the big problem is that not all wallets use the same path. I've seen such threads come up occasionally on reddit where people are trying to figure out the derivation paths of old wallets that are not active anymore.

Practice the restore process, verify the outcome! Too many people think: I have a backup, I'm safe. Unless you've actually verified it, I'd say: you don't have a working backup at all.

Mobile wallets often force you directly to verify during the backup process but many only require you to enter a few specific words. Lets say 5 words located at specific places in the order. While this sounds good from usability side, it can also cause problems.

Document everything related to your backups. You will thank me years later.  

There is no reason not to except laziness. If someone finds your seed the extra information hat you have written there won't do you any harm since you lost everything already. 

[Lucius]

Another important thing, I think that every seed that stores private keys of significant value should be additionally protected with a passphrase, which of course must be kept separately from the seed.

It is good advice but it is very unlikely that someone is going to randomly guess your 24 word seed phrase.

It's not that someone will guess your seed just like that, because that's almost impossible, considering that the seed is just a visual representation of something much more complex, which makes the whole thing so safe. Additional protection in the form of a passphrase serves to protect your primary wallet if someone forces you to open it, as well as if someone finds your seed (intentionally or accidentally), and without the passphrase that seed would only recover the wallet in which it will be a decoy (a small amount of coins).

If people practice 2FA for so many things, I don't see why they wouldn't do it for their non-custodial wallets as well.

[JiiBs]

It is worth knowing also that not all hardware wallets are cold wallets. Ledger Nano is not a cold wallet. It can easily be known because people using it can easily send their seed phrase online to backup companies.

Sending seed phrases online to backup companies you say…

Is this ideal for security reasons?

We know how it’s never ideal to have your seed phrases or private keys online let alone, putting it at the hands of a backup company which would be a target for brute forcing the company site and other firms to hacking not ignoring an inside pathway.

How ideal would this really be, using backup companies for storing your private key or seed phrases.

[Dogedegen]

Another important thing, I think that every seed that stores private keys of significant value should be additionally protected with a passphrase, which of course must be kept separately from the seed.

It is good advice but it is very unlikely that someone is going to randomly guess your 24 word seed phrase.

It's not that someone will guess your seed just like that, because that's almost impossible, considering that the seed is just a visual representation of something much more complex, which makes the whole thing so safe. Additional protection in the form of a passphrase serves to protect your primary wallet if someone forces you to open it, as well as if someone finds your seed (intentionally or accidentally), and without the passphrase that seed would only recover the wallet in which it will be a decoy (a small amount of coins).

The argument about someone forcing you to open your wallet is not really valid for me, that sounds like a theoretical scenario that will unlikely to play out in reality as that. Someone suspects or even knows you have a lot of crypto. They send goons to you to force you to open your wallet. You open a wallet that has $1000 in it. Do you really think anyone except the stupidest street goons would believe this? It is akin to giving them your wallet freely with $200 in cash and saying this is all you have when the rest of it is stuffed under your mattress, when you have a $100k car in front of your house. 

For the second thing I agree, but the easier defense is to never backup your whole seed phrase anywhere. In that scenario even if you use a passphrase they would need 3 pieces of information to get your wallet instead of 2.

It is worth knowing also that not all hardware wallets are cold wallets. Ledger Nano is not a cold wallet. It can easily be known because people using it can easily send their seed phrase online to backup companies.

Sending seed phrases online to backup companies you say…

Is this ideal for security reasons?

I don't know why you are asking this because the point of his post is to be critical about their stupid solution. They are a greedy company that has sacrificed security and privacy for a little guaranteed revenue.

[Cricktor]

For sure. I don't recommend using custom derivation paths every, but the big problem is that not all wallets use the same path. I've seen such threads come up occasionally on reddit where people are trying to figure out the derivation paths of old wallets that are not active anymore.

I wasn't speaking of custom derivation paths, but if someone uses those, they should know what they're doing and of course documentation is then mandatory. It doesn't really hurt to simply write down what your current wallet uses. It may also spark a user's interest to learn about and understand what a derivation path means.

It helps at later restore, especially when you have to use a different wallet for the restore, for whatever reasons.

Mobile wallets often force you directly to verify during the backup process but many only require you to enter a few specific words. Lets say 5 words located at specific places in the order. While this sounds good from usability side, it can also cause problems.

I've seen quite some mobile wallets that don't really force you to write down your mnemonic recovery words. They tell you, you should make a backup but often don't force you to do it. The latter is a totally wrong design by default in my opinion, because there will be users who don't understand the importance of an analog backup yet and will skip it. Those will cry later when their mobile phone gets lost, broken or unusable for other reasons. Those noobs will loose coins.

There is no reason not to except laziness.

I don't understand that part, but I don't have to.

If someone finds your seed the extra information hat you have written there won't do you any harm since you lost everything already.  

You're twisting the message in a way, that I hardly find useful. If mnemonic recovery words are stored in a backup that potentially can be compromised (I know you can't exclude this completely), then you have a weak and less secure backup.

But I was talking in a more broader scope of documentation of your backups. If you have e.g. multiple different locations why not document this and keep this documentation somehow available to you. Human memory is fragile, people forget details after days, weeks, months or years. That's totally normal and happens.

Something bad can happen to you. You may recover, you may not. Are your assets still retrievable for you after a severe memory loss or for your heirs if you can't anymore?


I'd recommend to thoroughly assess how your assets could be lost and at least apply countermeasures for the most relevant loss factors which have a reasonably high probability. You can countermeasure anything...

So, additionally related to your quoted part: if someone can find my mnemonic recovery words (you say "your seed"), I shouldn't have them stored unprotected. A complex additional mnemonic passphrase makes the recovery words useless to an unintended finder. A sacrificial wallet on the non-protected seed could serve as a canary for compromise.

Apparently you shouldn't keep mnemonic recovery words and protective additional mnemonic passphrase in the same spot. Having both in the "documentation" is a single-point-of-failure problem. I think this is not the right place to elaborate deeper.

[Dogedegen]

For sure. I don't recommend using custom derivation paths every, but the big problem is that not all wallets use the same path. I've seen such threads come up occasionally on reddit where people are trying to figure out the derivation paths of old wallets that are not active anymore.

I wasn't speaking of custom derivation paths, but if someone uses those, they should know what they're doing and of course documentation is then mandatory. It doesn't really hurt to simply write down what your current wallet uses. It may also spark a user's interest to learn about and understand what a derivation path means.
It helps at later restore, especially when you have to use a different wallet for the restore, for whatever reasons.

Nowhere did I try to say that you were talking about custom derivation. I was adding that custom derivation paths are bad and that information regarding derivation paths is needed in any case because wallets use different ones.

Mobile wallets often force you directly to verify during the backup process but many only require you to enter a few specific words. Lets say 5 words located at specific places in the order. While this sounds good from usability side, it can also cause problems.

I've seen quite some mobile wallets that don't really force you to write down your mnemonic recovery words. They tell you, you should make a backup but often don't force you to do it. The latter is a totally wrong design by default in my opinion, because there will be users who don't understand the importance of an analog backup yet and will skip it. Those will cry later when their mobile phone gets lost, broken or unusable for other reasons. Those noobs will loose coins.

The problem is that there is no real way to force them. Many wallets won't let you fully complete the backup procedure to remove the warning relating that unless you enter the correct words. But if you enter the right words does that mean you have really done the backup? No. There is simply no technological solution that can actually force you to make a physical backup.

There is no reason not to except laziness.

I don't understand that part, but I don't have to.

There is no excuse for not writing a bit of extra information with the seed phrase. The only explanation would be laziness.

If someone finds your seed the extra information hat you have written there won't do you any harm since you lost everything already.  

You're twisting the message in a way, that I hardly find useful. If mnemonic recovery words are stored in a backup that potentially can be compromised (I know you can't exclude this completely), then you have a weak and less secure backup.

You are assuming that post is against yours, but I am in agreement with you. All backups can be compromised all it takes is for someone to find it. I was saying that people should not argue against adding extra information alongside the seed because if anyone finds that in any case the wallet is compromised.

But I was talking in a more broader scope of documentation of your backups. If you have e.g. multiple different locations why not document this and keep this documentation somehow available to you. Human memory is fragile, people forget details after days, weeks, months or years. That's totally normal and happens.

Something bad can happen to you. You may recover, you may not. Are your assets still retrievable for you after a severe memory loss or for your heirs if you can't anymore?

Yes, and I am saying that there is absolutely no valid reason not to include such information.

[Rikafip]

When I wanted to transfer some alts that I had stored on them (X) I couldn't do it until I upgraded the firmware to the latest version which took a little longer because I was 3 or 4 firmwares behind.

Hm, I didn't have those issues so far as I am also avoiding updating. Then again, I had S and not X version so maybe that's why.

If you need something to store alts, I recommend the latest version of Trezor, and if you want something just for Bitcoin, you can't go wrong with Foundation Passport. You can order both devices at PO Box (tested personally) so you don't have to worry about your personal data being leaked.Yo

Even though like 98% of my portfolio is BTC, I would still like to be able to store alts as well. Another solution could be having 2x HW, but that's also hassle.  J

You can order both devices at PO Box (tested personally) so you don't have to worry about your personal data being leaked.

Yep, that's the way I plan to do it when I buy the next HW as I learned my lesson from Ledger leak (I was one of those who bought it directly from them).

[BlackBoss_]

Even though like 98% of my portfolio is BTC, I would still like to be able to store alts as well. Another solution could be having 2x HW, but that's also hassle.  J

If 98% of your portfoli is bitcoins, 2% for altcoins, it's posisble to store altcoins in many wallets like Metamask, Myetherwallet, and more. They are not safe like hardware wallets but if you don't want to store them in a same hardware wallet of bitcoins, don't want to store them in exchange accounts, it's your only method. If you choose this method, then you will have many choices as many wallets are available for altcoins.

If your fund is big, I don't see how you can not afford to spend money for purchasing a second hardware wallet that is used only for altcoin storage.