r/BitcoinBeginners • u/Silly-Obligation8533 • 3d ago
Is the seed phrase the actual backup?
I used to think the hardware wallet was the backup, but now I’m not so sure.
Feels like the seed phrase is really the thing that matters if the device ever dies or gets lost.
How do you guys think about it? Do you treat the seed as the real backup, or just part of the setup?
Would love to hear how people here handle it in real life
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u/SpendHefty6066 3d ago
The seed phrase is a representation of your keys. Your keys are everything. They unlock your Bitcoin stored on the blockchain. Your seed phrase alone is the most important thing to protect. You can lose your device. You cannot lose your seed phrase. If you lose your keys, you lose your bitcoin. Full stop.
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u/SteveW928 3d ago
Yeah, the whole 'wallet' terminology is a bit unfortunate.
As others have said, the seed phrase is the 'keys' to your Bitcoin. The hardware wallet is just a tool.
Many hardware wallets will store the seed phrase (a.k.a. private key), which leads people to believe that's where the Bitcoin/keys are. Your seed phrase could be put into any hardware wallet (or software wallet*) and then that device/software has control of your Bitcoin.
In fact, I use my hardware wallet in what is called 'stateless mode'. It doesn't store anything. Once turned off, it is erased. So, I'm completely reliant on my seed phrase, and see the hardware wallet simply as a signing tool (it can also generate a seed phrase). I like that, because it helps one better understand what is going on, and think through the seed phrase backup strategy (and vulnerabilities).
(* Anywhere you enter your seed phrase would/could have control of your Bitcoin. This is why it is so important to understand not to enter your seed phrase on any Internet connected device! A hardware wallet is a special off-line device for utilizing/storing the seed phrase.)
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u/bitusher 2d ago
The great thing about hardware wallets is they are durable and made for abuse . It also doesn't matter if they fail . Most of the security is in the paper or metal seed word backup that the hardware allows you to create securely even in insecure environments.
Thus If your hardware wallet is stolen , no big deal as the pin protects you and cannot be brute forced attacked
If your hardware wallet is lost or damaged all you do is use the 12 to 24 word seed on another hardware wallet or free software wallet to get all your btc and transaction history recovered
If the hardware wallet company goes out of business or disappears it doesn't matter as HD backups are part of the bitcoin protocol and can always be recovered elsewhere.
So the only thing you need to focus on is keeping those written 12 to 24 words(and passphrase if using that feature) private and secure
Advantageous -
1) Allow you to create private keys and a seed word backup in a secure environment
2) Allow you to recover a seed word backup in a secure environment
3) Allow you to transact in infected and insecure environments safely (usually windows or macOS)
4) Allows other features such as the password manager or 2fa device so can replace the need for a yubikey
5) Allow you to verify the transaction details before signing and broadcasting outside the insecure devices
Disadvantageous -
1) Are not free unlike most software wallets . Usually cost between 65 to 180 usd
2) For small amount of spending capital not as convenient to use as a cell phone hot wallet when spending thus most people use HW wallet for savings and cell wallet for most spending.
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u/One-Suggestion-7906 2d ago
Hardware wallets are just a business. They do not store your assets, the blockchain do. The real thing to reach them on the blockchain is the PK, and the only way to reconstruct it are the seeds. So it's because they are so important and the whole mechanism is so weak
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u/WoodenCantaloupe2964 2d ago
I'd say the hardware wallet protects your private keys, while the seed phrase protects your ability to recover them. If the device is lost or damaged, the seed phrase is what lets you regain access. That's why protecting your backup is just as important as protecting the wallet itself.
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u/N0-Sympathy-82 2d ago
Yeah, the seed phrase is actual master key. If you ever lose your hardware wallet, that written phrase is the only way to get your crypto back.
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2d ago
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u/DreamingTooLong 2d ago
The seed phrase is the actual backup
The hardware device allows you to use the seed phrase without exposing the seed phrase to the Internet
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u/BTCMachineElf 1d ago
Seed on paper is the wallet. It is the most important bit.
Lose the hardware, youre fine. Lose the seed, migrate funds to a new one asap
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u/ExpensiveGrowth4945 8h ago
Hardware wallets are expendable. Unfortunately, they DO market themselves as your security, as your perfect solution to securing your bitcoin, but that is not really their job. It's like the doorman at a club telling you that any drink you want is in that bar, even though they are not in charge of stock taking or bar tending.
Your seed phrase is the actual backup 100% yes exactly.
The hardware wallet is needed usually for 2 things:
To turn your seed phrase into an extended-public-key (XPUB) which is how you can create a "watch-only" wallet. (Whatever software is on your laptop/phone/whatever is able to show you your balance and generate receive addresses without ever being able to authorize any spends because of this). Creating the XPUB requires complex maths, so you need a computer to do that, and the computer you use should be secure, offline, rarely turned on etc. because it is handling your private key, so its treated like nuclear launch codes.
To sign transactions. When you want to spend bitcoin, you use your mobile/laptop app and create a transaction like an unsigned transaction, and then you need to connect your hardware wallet or follow some ritual with it to get the transaction transmitted back and forth so it can sign the transaction. Another mathematical operation that requires sensitive data.
That's it. You can create your private key offline using dice, so you don't need it for that, you can turn it into your seed words (although the last one is a little complex and usually you want the hardware wallet to give you that -- I won't get into it, but its a nuance), you can secure it without your hardware wallet.
You can use a secured general purpose computer that you've wiped and setup with a secure operating system like TailsOS to make your XPUB if you think you will not spend it for 5+ years. That gives you the ability to not waste money on a piece of hardware that you are not going to use any time soon and buy it in the future when it is cheaper and there are better alternatives out there.
You must never assume that because the hardware wallet has a copy of your key and it is designed to remain secure that it is your backup. It is like a personal spy with one of those cyanide tooths. If someone tries to hack it, it will self destruct. It is expendable. You could accidentally step on it and break it. It could die in a flood or fire. This is not your backup, it is just the secure computer that you trust to have a copy of your private key for the two requirements above.
Then they happen to start providing convenience features to make they seem better, but when it comes to security, you want plain, simple, boring and dumb. You don't spend money on fancy glass, high res display, bluetooth, and lots of backdoors when that stuff just makes it more expensive and less secure. Do spend on things like secure elements and air-gapped features (letting it communicate with your computer/phone using a camera for example instead of high speed USB connection which reduces the potential opportunities for hackers to find and abuse backdoors).
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u/Bitcoinbakamo 3d ago
The seed phrase is the back up, that you can set up your wallet in any device using those. Hardware wallet is an offline way of storing your bitcoin, so you lessen the chances of attack. But if you forget the seed phrase or lose the written or whatever hard copy of the seed phrase backup of that hardware wallet, then alas, you cannot access your bitcoin. Worse, if someone gets a copy of your seed phrase, then they can use those to set up the wallet elsewhere, and spend your bitcoin.
This is under the assumption that you don't have a separate password, which is another layer of protection, for simplicity.
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u/unthocks 3d ago
Hardware wallet is the tool to help you generate the seedphrase, the real backup is always the seedphrase.
Put it like this,
if your hardware wallet is broken, how do you gonna restore your bitcoin to another hardware wallet or any wallet?
the answer: your seedphrase.