Unlike money in the bank, crypto does not have a customer support line you can call when something goes wrong. Once your coins leave your wallet without your consent, they are gone for good. That is why hardware wallets exist. They give you a physical device that stores your private keys offline, away from hackers and online threats.
But here is the truth: owning a hardware wallet does not automatically make your crypto safe. The way you set it up matters even more than the wallet itself. And sadly, many people do not realize this until it is too late. In this article, I will discuss common mistakes people make when setting up a hardware wallet so that you can avoid them.
Let’s get started!
KEY TAKEAWAYS:
- Don’t buy hardware wallets from random online stores or second-hand sellers because someone may have installed malicious software on it or kept a copy of the recovery phrase that they plan to use later to steal your coins.
- Make sure you update your wallet’s firmware to protect yourself from risks that hackers already know how to exploit.
- Test your recovery phrase right after setup to ensure you are backing up the correct information.
- Choose a PIN that is long enough and not predictable to make it difficult for someone to get into your wallet.
Top 10 Wallet Setup Errors to Avoid
Here are common mistakes to steer clear of to give your crypto the protection it deserves:
- Buying From Unverified Sellers
Many people buy hardware wallets from random online stores or second-hand sellers because the price looks good. This is risky because if your device comes from an unverified source, it could already be tampered with. Someone may have installed malicious software on it or kept a copy of the recovery phrase that they plan to use later to steal your coins.
This is why you should always buy your hardware wallet directly from the official manufacturer or from authorized resellers. Yes, the price may be a little higher, but you are paying for peace of mind.
- Skipping Device Verification
Every reputable hardware wallet comes sealed or with a way to check that it has not been tampered with. Some brands use holographic seals, while others give you steps to confirm the firmware. Instead of just assuming that the device is fine, take a few minutes to follow the manufacturer’s instructions and confirm that your device is genuine.
Read Also – How to Set Up and Use a Hardware Wallet
- Not Updating the Firmware
Unboxing your wallet and using it right away without checking for updates is dangerous because manufacturers often release firmware updates to fix bugs and patch security issues. If you run outdated firmware, you may expose yourself to risks that hackers already know how to exploit.
So, before you set up your wallet, go to the official website, download the latest firmware, and take a few minutes to install it. You should also make it a habit to check for updates regularly, not just when you first set up the wallet.
- Creating Your Recovery Phrase Online
Some people think it is easier to use an online generator to create their recovery phrase or write it in a digital note. However, you should never do this. It is better to always generate your recovery phrase directly on the hardware wallet itself. That way, it never touches an internet-connected device, which reduces the risk of exposure.
- Taking Pictures of Your Recovery Phrase
You may feel tempted to take a quick photo of your recovery phrase for convenience. Do not do it because phones get hacked, stolen, or synced to the cloud without your knowledge. That photo could end up somewhere you did not intend, and once it is exposed, your funds are at risk.
Instead, stick to the old-fashioned way of writing your phrase by hand on paper and storing it somewhere safe. If you want something more durable, invest in a metal backup plate that can survive fire or water damage. That way, you protect yourself both from hackers and from accidents.
- Not Testing Your Recovery Phrase
You might think that once you write down your recovery phrase, you are done. But how do you know you wrote it correctly? Many people have lost access to their funds because they made a small mistake, like writing “one” instead of “won” or missing a word.
The smart thing to do is test your recovery phrase right after setup. Most hardware wallets give you the option to do this. It may feel tedious, but it is better to confirm now than to find out years later that your backup does not work.
- Keeping Your Recovery Phrase With the Wallet
Some people store their recovery phrase in the same place as their hardware wallet. That defeats the purpose. If someone steals your device and also finds the phrase, they have everything they need to take your funds.
As such, it is better to keep your wallet and recovery phrase in separate locations. You could store your wallet at home and your recovery phrase in a bank deposit box, or give it to someone you trust. The important thing is to make sure they are not easy to find together.
- Using Weak PINs
When you set up your wallet, you will be asked to create a PIN. This is another layer of security, but it only works if you choose wisely. A simple PIN like 1111 or 1234 is easy for someone to guess, and if they get access to your device, they can get in quickly. This is why you should choose a PIN that is long enough and not predictable.
- Not Backing Up Properly
Having only one copy of your recovery phrase is risky because paper can get lost, burned, or damaged. If that happens and you have no backup, your funds are gone forever. Therefore, you should have more than one backup stored and spread in different locations to make it much harder for a single event to wipe out your safety net.
- Entering Your Recovery Phrase on a Computer
If your hardware wallet asks you to recover funds, always do it on the device itself, never into a computer or phone. Malware can record your keystrokes or take screenshots without you knowing. As a result, you should stick to the wallet’s own recovery process so your keys stay offline, which is the whole point of using a hardware wallet in the first place.
Conclusion
It is important to take your time when setting up your wallet. Do not rush through it, double-check everything, and keep your recovery phrase safe and private. You worked hard to earn your crypto, and you deserve to do what you must to keep it secure.
References
- ledger.com – Security Tips for Hardware Wallets
- cryptovantage.com – The Top Three Mistakes People Make When Using Wallets
- thebossmagazine.com – 3 THINGS THAT CAN GO WRONG WHEN SETTING UP YOUR CRYPTO WALLET (AND HOW TO AVOID THEM)
