One of the most beneficial characteristics of crypto blockchain is decentralization. The US dollar is protected by the government, banks keep the majority of your assets safe for the most part. Crypto transfers that responsibility of protecting assets to the users. In a decentralized system, transactions are verified by a network of computers rather than a central authority. This means that the responsibility of verifying the authenticity of transactions is distributed among users, making the system more transparent and less prone to fraud. You can choose to give the responsibility of protecting your assets to anyone who would take it, but I recommend to have trust in yourself for this matter. So in this post you will learn to build on the idea of having something thats truly yours. There are basic rules on maintaining ownership of your assets, the number of rules will increase over time just as banks had to increase security as bank robberies became more popular. Proper precaution is mandatory to decrease the odds of having your assets stolen.
Crypto Wallets
Like having a physical wallet to put your money in, crypto developers created wallets to store crypto assets. Far more complex than a wallet that was invented in the 1300s, but with a much better user experience some could argue. There are two major types of crypto wallets: hardware and software, each with different purposes. Hardware wallets are the most secure, while software wallets are more accessible and convenient. For now we will talk about Hardware wallets, Trezor in particular.
Rule #1 – Never buy your wallet from anywhere other than the official website https://trezor.io/. You don’t want anyone selling you a wallet with malicious code installed into it, then later you’re wondering where all your funds went; to the person who sold you the wallet.
Rule #2 – If you’re going to hold assets that you can’t afford to lose, then buy two. One will be your checking, take this wallet everywhere with you on your regular day to day commute if needed. The other will be your savings where you hold most of your assets, you keep this in a safe place at home until you need to transfer more funds to you checking or you need to actually access those funds. It shouldn’t leave you home unless you’re moving out or moving it to a safer place. Having two wallets will reduce the risk of your savings wallet being compromised, you will use it for fewer transactions; those transactions will be in the safety of your home, and mostly to your own checking wallet.
Rule #3 – Make sure that the device you connect your Trezor to is not compromised. I’d recommend getting a cheap phone ($49) brand new, sealed out of the box from Walmart or Target, setup your Trezor on there. Only use this device to sign transactions. Never connect it to the internet only use its cellular date to sign transaction. DON’T USE THE DEVICE FOR ANYTHING ELSE, NO APPS, NO ONLINE SHOPPING OR BROWSING!
Rule #4 – When you first set up your wallet go into a room with no electronic devices that can listen or see. You never know who can be listening through those microphones and watching through those cameras. Google, Alexa, mobile phones, laptops, desktops, smart fridges ANYTHING can be compromised! Make sure that the device you’re connecting your Trezor to has a camera cover, use tape for convenience and DO NOT SPEAK your seed out loud.
What is a recovery seed?
- Your recovery seed may also be referred to as a: seed, seed phrase, mnemonic, recovery phrase, BIP-39 seed phrase (plus various combinations of these words)
- It is an ordered list of English words that contains all information necessary for recovering your wallet (i.e., accessing bitcoin or other cryptocurrency funds on-chain)
- A recovery seed provides full access to the associated wallet (the private key is mathematically derived from the seed)—this is why you must keep it safe
Here are instructions on how to setup your wallet on android
https://trezor.io/learn/a/trezor-on-android
Rule #5 – NEVER input your seed onto anything digital, no phone, no word document, no USB stick nothing. Keep it analog. Paper, steel, wood. as long as its safe from fire, flood and theft.
Rule #6 – After your wallet is set up wipe the device and recover it using your seed, you need to be 100% comfortable with this process, do it 3 times then send something like $30 onto your Trezor and wipe it again. Now recover it again, it’ll feel different knowing you could lose money.