You don’t have to be a crypto expert when venturing into the blockchain realm, but you do have to understand some blockchain basics in order to manage your crypto assets effectively.
One of the essentials for this job is the crypto wallet. Its name clearly suggests that we use it to store our virtual holdings, but the truth is that the digital wallet has a much more important role when it comes to Bitcoin and other cryptocurrencies.
Blockchain-based coins exist only virtually, and they never leave their natural territory — the blockchain. When you buy a piece of crypto, the crypto doesn’t “travel” to your wallet. Instead, it’s you who gets access to that crypto on the blockchain through a private key — a unique password-like element generated by your very crypto wallet.
So, everything you can possibly do with your cryptocurrencies — storing, monitoring balances, sending, receiving, and swapping — begins and ends with your private key. Today we’re reviewing a device that provides a secure environment for your private keys — the Trezor Wallet.
What Is a Hardware Wallet?
In general terms, crypto wallets are a piece of software that allows you to store and manage your funds offline. They contain a pair of keys — a public and a private key, which operate in a paring mode, just like your email username and password. You can share your public key to receive crypto from other senders, but your private keys are the only way to prove ownership over the received funds.
Hardware wallets are physical devices that come with built-in software, making them superior to browser-based, mobile, and desktop wallets that rely on an internet connection. To clarify, hardware wallets are small-sized USB devices, so they do need a computer connection and a supporting software interface to execute transactions and monitor balances with convenience.
However, they keep the keys inside the wallet device and enable you to make the transaction confirmation directly from the wallet hardware. Hence, even if the software gets attacked or the computer device gets infected, this won’t affect the well-being of your wallet keys.
The superior security edge of cryptocurrency hardware wallets over other types of Bitcoin wallets was immediately recognized in the crypto community. This resulted in an ample industry of hardware wallets offering different device models with prices ranging from $50 to $350.
For the purposes of this article, we’ll review the basic version, but we’ll also explain the difference between the two Trezor products.
The Trezor hardware wallet is a product of a renowned manufacturer in the crypto industry, SatoshiLabs. The company was established back in 2013 with headquarters in Prague, Czech Republic, and
apart from the wallet, it has already released a few products and services, including:
- CoinMap — a digital map tracking all locations that accept Bitcoin payments across the globe;
- Slush Pool — one of the largest Bitcoin mining pools, named after the SatoshiLabs CEO, Marek Palantius, also known as Slush.
Trezor appeared on the scene in 2014 as the first hardware storage solution, and since then, it has been one of the leading brands in the industry, together with its direct competitors, Ledger and KeepKey.
The wallet has a pleasing aesthetic appearance — it’s a tiny device available in white, black, and grey, with dimensions 60mm x 30mm x 6mm, an OLED display, two navigation buttons, and a micro USB port.
Optionally, you can also order an OTG cable to connect the wallet with an Android smartphone and a Cryptosteel — an accessory that allows you to keep your recovery seed on a steel board instead of writing it down on a piece of paper.
As for the purchase, you can order the wallet from its official website or a selected network of resellers that offer convenient home delivery. It’s very important to know that hardware wallets are never to be bought second-hand because of possible scams. Once you learn how Trezor works, you’ll see why re-using the same wallet can easily give access to your crypto holdings to the previous wallet owner.
How Does Trezor Work?
The general feeling about hardware wallets is that they’re a bit obscure to use because of the required installation and configuration process. However, we can’t say that Trezor isn’t a user-friendly device as all set-up steps are intuitive enough even for users without previous experience in crypto trading.
Bitcoin and Other Supported Cryptocurrencies
Apart from the robust security, the best thing about hardware wallets is their multi-currency support. Trezor isn’t an exception as it enables you to store over 1,000 different cryptocurrencies, including Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC), Bitcoin Cash (BCH), Dash (DASH), ZCash (ZEC), and the full range of ERC20 tokens. Rember that the basic Trezor One doesn’t support some of the bestsellers like Cardano (ADA), EOS, Ripple (XRP), and Monero (XMR), but the upgraded Model T does.
The wallet can be connected to main operating systems like Windows, Mac OS, and Linux. Android and iOS interaction is also possible through an OTG cable. You can use the Firefox and Chrome extensions for software integration or download the official interface app —Trezor Suite — on your desktop from the Trezor official website.
You’ll immediately notice that the interface is simple and clear, allowing sleek management of all crypto assets you own. Apart from the regular wallet functionalities, such as storage and crypto transfers, Trezor has recently launched an exchange feature, which allows you to trade crypto directly through your wallet address. As the Trezor team stated, this feature is powered in cooperation with these third-party exchanges — Changelly, ChangeNOW, and CoinSwitch. Note that the wallet is a non-custodial service so all information required by the respective exchanges won’t be facilitated by SatoshiLabs.
Trezor is an open-source wallet that uses the Hierarchical Deterministic (HD) key creation and BIP32 transfer protocol for generating new wallets.
Finally, Trezor belongs to the first-gen crypto wallets, which are full-node wallets without exception. This means that you need to download a full copy of the blockchain you use locally. For a fully trustless use of Trezor, you can get Blockbook on your desktop and start a local run of your Trezor Wallet. Users who integrate Electrum within Trezor can also establish a full node through the Electrum Personal Server.
How to Get Started With Trezor?
Regardless of which Trezor model you’ve chosen, the setup process flows exactly the same way. We’ll go through all the steps you need to complete to install and activate the wallet successfully:
- Pair your Trezor wallet with your computer through the USB cable from the device package and go to trezor.io/start through one of the supported browsers.
- Select a Trezor Wallet model — Trezor T or Trezor One.
- Download and install the Trezor Suite (Trezor Bridge) software and refresh the page.
- At this point, your computer will automatically identify the wallet device, so it’s time to install the required firmware. No hassle – the install firmware box will automatically pop up on your screen.
- When complete, disconnect and reconnect the Trezor wallet device.
How to Set Up a Trezor Wallet
With your firmware loaded, Trezor will start creating a new wallet automatically. Before it starts the process, you’ll have to select either Restore an Existing One or Set Up a New Wallet. We’ll go for the second option, as the first one is designed for recovering funds from lost or damaged Trezor devices.
If you’re a new user, at this stage, you’ll need to create a proper backup for your Trezor wallet, so if something goes wrong with the existing one, you’ll be able to recover your “locked” crypto assets as well.
Create a Recovery Seed Phrase
Hardware wallets convey the backup process through a recovery phrase called a seed or passphrase. By default, Trezor T generates a wallet with 12 seed words, while Trezor One generates a 24-word seed. Both Trezor wallets allow adjusting the length of the seed phrase to 12, 18 or 24 words. Since this is the ultimate protection of your crypto assets, it’s of utmost importance for you to save the recovery phrase appropriately by writing it down and depositing the paper in a safe location. Never store your phrase in a digital form, as convenient as it may seem in the first place.
Set a PIN Code
Technically, the seed-phrase stage is optional yet strongly recommended. If you’ve already stored the seed phrase safely, let’s move back to the wallet setup. Now it’s time to complete the PIN-number stage, which will be the immediate safeguard measure against any unauthorized access.
Your wallet will generate a random combination of numbers, which will serve as a padlock for accessing your wallet. For added security, the code won’t be shown on the desktop interface but only on the wallet screen by implementing a shuffled PIN pad mechanism so that when you insert your PIN, nobody can track the numbers you’re pressing.
Trezor will also allow you to set a name for your wallet device just in case you own more than one Trezor wallet.
Create a New Wallet Address
For each new login, you’ll first have to connect the wallet with your computer and then, open the Trezor Bridge. Depending on your trading portfolio and the current number of different crypto coins in your possession, you can open as many new public keys, i.e. addresses as you need. Unlike its competitors, with Trezor, you won’t have to use the existing address before opening a new one. Certainly, you’ll be able to open and manage the old addresses at any point.
Complete a Transaction
The options for receiving and sending transactions are transparently displayed on the interface, so you must be extra careful when re-writing the addresses. After you finish the transaction, you’ll see the updated balance of your wallet account on the homepage, together with the current price of the transacted cryptocurrency and a chart of your transactions over the past few days.
Trezor Model One vs Trezor Mode T
The basic model offers effective protection of your crypto assets through U2F two-factor authorization and Password Manager.
On the other hand, the T model has inherited all functionalities from Trezor One but sports a more elegant design, a coloured touchscreen, an SD card slot, and most importantly, it supports a larger number of altcoins.
Trezor vs Ledger Nano S and Ledger Nano X
The direct Trezor competitor Ledger also comes in two different versions — Ledger Nano S, the basic model, and Ledger Nano X, which is technically more advanced than the original version.
Even though Trezor was the original hardware-wallet representative, it seems that both Ledger versions have surpassed it in a few aspects that are considered instrumental when choosing the best cold storage:
- A larger number of supported cryptocurrencies;
- A larger number of supported third-party wallets and exchanges;
- A built-in staking option.
When it comes to security, both wallet brands work on a similar basis — however, Ledger has a double chip base and Secure Element (SE), which makes it slightly safer from physical risks. On the other hand, both Trezor models are distinctively better for beginners in terms of simple setup and ease of use. Moreover, the design of the basic Trezor model is more sophisticated than the “clumsy” appearance of the Ledger Nano S. However, the advanced Ledger Nano X offers an improved design with a larger screen, more memory, and a Bluetooth connection.
Added the history of hacks attacks on Trezor in the past years, we’d say that Ledger is a slightly more efficient solution for the money. However, the Trezor support and development team is constantly working on improving the wallet’s downsides.
Hardware wallets are crucial for whale investment as they’re capable of delivering the best security standard in the industry. If your investment is smaller than the price of the digital wallet, then maybe it’s too early to invest in a hardware wallet. If you’re dealing with crypto as a day trader, the best thing you can do is combine a hardware wallet with some super-fancy wallet application and get the best of both worlds.
Regardless of your personal aim in this decentralized world, if you’re a potential candidate for a brand gadget, Trezor is always a wise idea. Trezor has gone a long mileage in the crypto world despite the current Ledger supremacy, so at least we can rely on its reputable status and upgraded traits.