Gaining the confidence to be your own bank PART #1: things you NEED to do when you first receive your hardware wallet
There has been a lot of recent discussion talking about how exchanges are possibly a safer place to store your crypto than hardware wallets.
The biggest argument for solely using exchanges is that people feel too scared or uneducated in managing their own tokens.
If there is interest, I will turn this into a series of confidence building posts aiming to educate newer crypto users in becoming their own bank.
Becoming your own bank is one of the core aspects of crypto, and if too many people prefer centralized options, it will take significantly more time for adoption to take place.
Part 1: things you NEED to do when you first receive your hardware wallet
I have posed this advice before, but I'm hoping this time around many people on the fence can see that you just need to take a few precautions to keep your tokens safe.
If you fully understand the below there is no reason not to trust you or your device to keep everything safe.
In 99%+ of cases (99% is a low estimate) you will receive a legitimate hardware wallet. However, there have been cases of fake Ledger/Trezor wallets, or even wallets already set up (more on this below).
These steps are particularly important if you buy from places like Amazon where there is very little individual stock quality control.
When setting up your hardware wallet for the first time, you will be generating a BRAND NEW SEED. If you did not do this step during the setup, it's possible that someone has set it up, hoping you don't notice.
They then monitor your wallet for transactions and drain your wallet.
Every wallet has a process of generating your seed, then displaying it for you to record. This applies to every type of wallet, so if this isn't something you did you should investigate ASAP as your funds may be at risk.
After you have properly set up your new wallet and have noted down your seed, it's time to wipe your device. Yes, this is necessary.
Before sending a single transaction to your new address, factory reset your device and recover it using your seed. This ensures you have noted down your seed correctly and you are capable of restoring your wallet if it gets damaged or stolen.
I personally know people who had no trouble setting up their wallet, but needed a lot of help recovering it. Practicing this with a zero-balance wallet is an extremely valuable exercise.
This is such an important step that too many people don't do. Always practice disaster recovery as hardware devices will always eventually fail. It may be 15 years from now, but hardware doesn't last the test of time.
Also worth noting – your seed can be used to recover your wallet across another medium. For example, the seed from your Trezor can be put into a desktop wallet like Exodus and you will be able to access everything.