Trezor tips and tricks: Trezor and backup seed storage
One of the first important hurdles crypto newbies will have to overcome is the ability to use a hardware wallet that will allow them to safely secure and take full control of their coins.
There are many great guides and tutorials explaining how to setup the various hardware wallets on the market today, and most manufacturers will make it as easy and painless as possible.
But one important, overlooked area that is lacking any guides or documentation, is the topic of storage of the hardware wallet device itself along with the backup recovery seed.
Most hardware wallets like the Trezor (what I use) and Ledger Nano, come with the ability to setup a backup seed, which is usually a list of 24 random words that can be generated and written down at the time of setting up the wallet. This is part of the BIP39 Bitcoin wallet standard, you can read more about that here.
The reason for this is in case the device itself is lost or destroyed it is very important to have the ability to restore from a backup without compromising the security. So for this reason the words are usually written down on paper to keep them completely offline and private.
But one glaring issue with this is that the backup seed itself is simply written down on a piece of paper, and in most cases placed in a drawer and forgotten about. This leaves the backup seed vulnerable to fire or water damage along with theft if the thief knows what to look for.
So then what can be done to mitigate the risk associated with the storage of the device and backup seed? It could be a potential back door for a clever thief, or keep you locked out of the device in a worst case scenario like a fire or flood.
In this guide I'll go over several tips and tricks associated with the Trezor and backup seed storage.
1. Never carry the Trezor with you regularly or leave it in plain view.
This is more of a common sense trick because anyone with a good amount of money on the Trezor will be naturally cautious carrying it around in public or whipping it out in front of others. But newbies especially may be lulled into a false sense of security. For example, the device comes with a lanyard attachment giving the false impression that it is supposed to be carried around on a key chain or even around your neck. Keeping it on you increases the chance of theft and may give you unwanted attention from clever thieves that understand the value of such a device. People don't use a Trezor to store small amounts of money, so don't assume it will blend in if you use it in public. Consider storing it safely within your home and keeping it well hidden, but also accessible in case you need to move funds.
2. Try to memorize the pin number and don't tell anyone.
The best line of defense with the Trezor, after access to the physical device itself, will be the pin number. This number is designed to be easily memorized while being impervious to brute force hacking attempts. So avoid the urge to write this number down or tell anyone. If you need to have another person access the device in an emergency, it's better to tell them the location of the recovery seed instead. It's also a good idea to make this pin number unique, and not the same as your bank card pin, for example.
3. Consider using something like crypto steel or bill fodl to secure the backup seed.
For the reasons explained above, the piece of paper provided with the Trezor to store the recovery seed is not adequate and could put you at risk if you're going to store coins long-term. While not likely, a fire or flood could destroy the Trezor and backup seed at the same time, leaving you completely locked out of your wallet. Even if the risk is low, there are simple steps you can take to mitigate this. Consider storing the paper backup in a fire proof safe. This will give you some basic fire protection and more peace of mind, also consider placing the paper inside a waterproof sleeve just in case. If you don't want to use a safe or don't trust it, you can either etch the words onto a piece of steel, or consider using a product like crypto steel or bill fodl, which is a pre-made piece of steel that can hold multiple letters that can be arranged to form the backup word seed. This is what I use and recommend to others, and will give you the best protection and peace of mind in case of a fire or flood.
4. Keep the device and backup seed well hidden.
This goes without saying, but some people may not realize the importance of the backup seed or how it can potentially be used by a thief to steal your funds. Since you will only need the backup seed in case of an extreme emergency or if you move, it should be very well hidden. Somewhere even a clever thief would not think of looking. So try to avoid obvious places like under the mattresses, dresser drawers, or the medicine cabinet.
5. Do not store the Trezor and backup seed in the same place.
Another common sense tip, but some people may not realize it. If both your Trezor and backup seed are destroyed in a fire together, then you're locked out of your wallet, so try to keep them separated and protected (see point #3 above). But also don't keep the backup seed with the Trezor simply because it defeats the purpose of the device if you have backdoor to access the wallet right in front of you. Keep the backup seed well hidden and away from the device itself.
6. Consider using a decoy wallet.
Once you become more advanced with your Trezor, you can consider setting up a hidden, decoy wallet. This is important because it allows you to separate a small amount of your coins in case you need to unlock the device under duress. The thief will then not know that this is actually a smaller decoy wallet while the majority of your stash is still secure on a hidden wallet on the device. Check out this article for more information.
As you can see, there's a lot of thought that goes into setting up and using a hardware wallet, and if you're going to be storing a large amount of funds on these devices you need to take it very seriously. And keep in mind that some of these, like where to store your backup seed, are things you will have to implement on your own, nobody can really tell you what to do here other than giving pointers or advice. Putting some extra effort will not only give you that extra peace of mind, but make sure that you have extra layers of security in place in case of a worst case scenario. The Trezor is a very well made and secure device, but that little bit of extra effort on your part could make all the difference.
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