Hardware cryptocurrency wallets are known for granting users full control of their crypto and providing more security, but such wallets are prone to risks such as theft, destruction or loss.
Does that mean that all your Bitcoin (BTC) is lost forever if your hardware wallet is lost, burned or stolen? Not at all.
There are a number of options to restore cryptocurrency for someone who has lost access to their hardware wallet. The only requirement to recover crypto assets, in that case, would be maintaining access to the private keys.
A private key is a cryptographic string of letters and numbers that allows users to access crypto assets as well as to complete transactions and receive crypto.
Most crypto wallets usually provide a private key in the mnemonic form of a recovery phrase, which contains a human-readable backup allowing users to recover private keys. The mnemonic form is typically enabled through BIP39, the most common standard used for generating seed phrases for crypto wallets.
Also referred to as a seed phrase, a BIP39 recovery phrase is basically a password consisting of 12 or 24 random words that are used to recover a cryptocurrency wallet. Crypto wallet platforms typically generate a seed phrase at the very beginning of setting up a wallet, instructing users to write it down on paper.
Not your keys, not your coins
According to executives at major hardware crypto wallet firms Ledger and Trezor, the safety of the recovery phrase is way more important than keeping the hardware wallet safe.
Keeping a private key safe is a guiding principle for the crypto community, embodied in the phrase: “Not your keys, not your coins.” The principle means that users are not really in control of their coins if they don’t own their private keys.
Both Ledger and Trezor wallets allow users to recover access to their wallets through a seed phrase by simply using another hardware wallet.
“A user could recover their wallet and funds on any of the other new Ledger wallets. Alternatively, they could also recover on a Trezor, SafePal or another hardware wallet device,” Ledger chief technology officer Charles Guillemet told Cointelegraph.
Users can also turn to software wallets to access their funds in case the hardware wallet was lost, stolen or destroyed. “If you lost your Trezor, but you still have your recovery seed, you can recover your funds through many hardware wallets and software wallets in the market,” Trezor chief information security officer Jan…
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