Topic: Before You Send Your Bitcoin To Hardware Wallets I Do This! - page 2. (Read 436 times)

That's a piece of great advice, I would recommend doing deposit and withdrawal testing by using 1% of your funds before you send everything at once. You never know what if you are not able to recover the funds from the newly hardware device you bought, what if it's the only faulty product and some sort of other issues like water damage etc? I am sure people do not think about these issues when dealing with this transfer.

The best ideal method to first take in action is to verify the source you're buying your wallet from, then secondly, when you want to use the hardware wallet, make sure that you first tested it just as being advised that you sent a little amount into the wallet first and then send it back to another wallet, if these steps are achieved without a problem them you can also take the effect use of the hardware wallet to serve you it purpose.

Secondly, if you already tested it and everything is working perfectly, then try as much as possible to ensure you handle it with good maintenance from any form of physical damage on the hardware, how we handle it matters here, avoid any chemical substance having contact with it, avoid excessive heat, water or any form of hardware damage on the wallet to make it more simple for use, we have to store it in a secured place that will not be rough handled.

It might seem like a lot of steps, but it does make sense. When you set up a new wallet, you generate a backup in the form of a seed phrase written on a piece of paper or something similar. How can you be sure your backup will work if you lose or damage your hardware device if you don't test it beforehand? Okay, maybe you don't need to factory reset your device and start the whole process over, but it's a good practice to at least test the backup seed by importing it into a software wallet on an offline device before you send any substantial amount to your wallet.

If HW is compromised they may  wait to catch the big fish and will not be pay attention to small amount initially sent to test the wallet. The best way to protect yourself from possible backdoors in  any new wallet, including hardware one , is to create multisig wallet that requires   at least two independent keys, one of them is  from your new HW while the other one - from device of other manufacture (or from software wallet, let's say Sparrow).

If you think your hardware wallet e.g. trezor, ledger, Bitbox etc aren't safe and you're test them by holding small amount of money, then check it back whether your coins are still there or not, that's not verify.

Verify is where you read entire the hardware wallet source code or verify GPG key, unfortunately not all people are understand about codes, so what you can do is trust them without any doubt.

The best choice is create your own cold storage through Electrum, make sure your device is 100% safe, verify the GPG key and do it everything offline.

https://electrum.readthedocs.io/en/latest/coldstorage.html

Is this really necessary? Or is this kind of overdoing it? Is this is your own way of making sure everything is perfectly secure with your new hardware wallet or is this an advice you also get from somebody or somewhere else?

I had my first hardware wallet years ago and I cannot remember doing these many steps when I first used it. I could have done it wrong, but this tip sounds a little superfluous to me. You've got only steps 1 and 2 in the OP, but apparently it's more than just a couple of steps. Setup your wallet, send a little amount, wipe it clean, factory reset it, set it up once again, send the money back to where it came from, and so on and so forth.

I don't know why we have to send it back to exchange even we can create a new address self on another software wallet like Electrum for testing. Just send a small balance from the hardware wallet to Electrum, and vice versa. And, to check your 24 mnemonic seed is correct with the address, you can use iancoleman running on an airgap pc or locally. This can minimize the error when you swipe it back into your hardware wallet.

Choose open source hardware wallets to use.

[LIST] Open Source Hardware Wallets

Because you have to spend money to buy hardware wallets, when you do it, buy it from official store and never try to reduce your purchasing cost a little by buying second-hand hardware wallets. It is very risky if you are not technical expert to test and verify those used wallets. You can lose big money by saving small money with second-hand hardware wallets. Risk is big, loss when happens is big so don't take that risk.

I also think, that as long as the wallet provider is legitimate enough, the kind of tests you recommended are not necessary.

What are you trying to test? If the hardware is legit, if the hardware is working, or if the hardware does not carry a backdoor.

The first one should be done by examining the packaging. If everything looks new and untouched you can check the wallet using software provided by the manufacturer.

The second one can be tested simply by setting up a wallet, turning the device on and off a few times, charging it and checking if it holds charge. You don't need to send money in and out because if you can set a password and access the device with that password it means it works. The wallet does not really send or receive anything. It's just a device used to confirm the key and passphrase. All the transactions are really done by software on your computer.

The third one may not manifest itself when you send a test transaction. If the device is infected the hacker may not try to steal your test amount of 0.001BTC, but will steal 0.1. Sending dust to the wallet will probably prove nothing if someone was good enough to plant a bug inside the hardware wallet or its cable. Yes, you read it right, it's possible to plant memory chips within the USB cables!

For me, as long as the wallet provider is legitimate enough, the kind of tests you recommended might not be necessary. It's advisable to store in a hardware wallet as it's safer compared to just letting your crypto sit in exchanges. So, if the most trusted wallet provider is not reliable, then it would affect the entire ecosystem, as people might think that storing crypto on any device or platform is not safe anymore, which could lead to a drop in interest to hold.

How often do people buy a hardware wallet, send money to it and find out it's been hacked or is bugged and wiped the keys from its memory by itself?
I wonder if you've done some research on this because I'd say this is very uncommon. Not saying it doesn't happen, but I haven't heard of anybody, who bought an original, unpacked device, verified that it's legit, set it up, sent the coins and lost everything.


What if you don't use an exchange, or can't send it back and forth? You don't trust a wallet provider, but you trust an exchange?
I buy my coins from a physical office, where I bring cash and they send coins to my address. I don't use centralized exchanges with KYC at all.

At first I would say it is not advisable to just start the process of saving your assets without test running your hardwares. Sometimes the hardware need to be properly tested before thinking of making any transfer from any device to it. One needs to be cautious and careful while doing it because if the hardware malfunctions while saving your assets without test running it, your assets are all gone. OP all you have said is just the right thing to do. Following the steps you have stated would save one the Heartache of losing their assets if properly done.

Like I have read other replies, reputable hardware wallet should be considered  when having the thought of buying one for yourself. Dr o well to always reset to factory settings after purchase before using it so as to making sure every setup before then is cleared for a fresh settings. By doing this I believe your assets are well protected.

This is wrong approach! Do not trust only Verify! Reputation can be bought.


No, I did not lose my coins. But this is a regular procedure for me whenever I get a new hardware wallet; I also use it on my hot wallet to check if the seed phrase I put down is correct.

Create a new wallet, backup your seed phrase, then delete and import it again to ensure you have the correct backup.
 
Never heard.

That's the first thing you should do after receiving a hardware wallet. Make sure to wipe and reset it to factory default and test the wallet to make sure the generated seed backup is not owned by someone else and to make sure it generates the right wallet.

And also take note of any hardware wallet that does not have open-source code like Ledger Nano. Better use a hardware wallet that has open-source code.

Did you lose funds? If yes, then to which hardware wallet? Actually, this is something totally new to me, and I did not know that we have to take that much precaution before making any transaction in a wallet. I tried to do some research but did not find any cases reported.

Well, if that's the case, then I will keep your words in mind next time and try to warn others too. Recently, I came to know that hardware wallets go dead if they are not in use for more than 1 year, and I am very shocked to learn this.

And I said that hardware wallets are not in a perfect state even after this much progress in technology. But still, there is room to grow.

You should note that there are hardware wallet that will be able to past those send and receive test and after a while, or when you get comfortable using it and you have a large sum it will get swept to a different location. So the first thing any newbie should consider when going for a hardware wallet is the company that is producing it (how reputable are they), is the wallet an open-source?, how are the seeds generated?, you can’t just go online search “hardware wallet” and then pick the first result that pops up and purchase it. If they do they’ll only end up losing their money even if they follow your advice. How the seeds are been generated matters a lot.

Not your keys, Not your coins but You should know this before moving your coins from CEXs, because most of you buy hardware wallets and use them right away without first testing them. Many Bitcoiners have lost their funds in the past due to a bad hardware wallet because they neglected to employ these easy crypto techniques; Do not trust, Only Verify!!!

Step 1.

Don't send your Bitcoin to a hardware wallet until you've thoroughly tested it. Taking your entire Bitcoin balance from your Exchange wallet and sending it to your ledger( cold storage ) without knowing what you're doing is extremely risky. First, you ought to send a small amount of bitcoin to your hardware wallet. Keep an eye out for it to appear there. Wipe your hardware wallet clean, factory reset it, and re-enter your seed phrase into your hardware wallet, plug it back into your computer, and check to see if your bitcoins are still sitting in your wallet as you believe.
 
Step 2.

Then send it back to the exchange. Check that you can receive and send Bitcoin, that you can wipe your device, that you can re-enter your seed phrase, and that everything still works. Do this with the smallest amount you can afford to lose; it is better to lose a single cent than your entire savings. Before sending all of your assets, make sure your hardware wallet is working.





Also, make a habit of distributing your assets over many hardware wallets; do not keep all of your coins in one location.