Ledger, Yubikey and other HW Wallets – risk of failure

Hey guys, my question is pretty much the title. I want to use a hardware wallet but i am not sure on how to prepare on the event of hardware failure?

Given those are electrical devices it is a certainty that at any point the hardware will start to fail.

Is there an option to prepare for this? To set up backups? Or will the solution be tu just buy a new wallet every 5 years or something?

How do you guys handle the risk?

I really want to get a bit more security for my portfolio but i am always thinking that it might be too risky to bond all my assets to an electrical device. Maybe i am just a bit paranoid.

Any thoughts?

EDIT: thank you for all the answers so far! The takeaway is : store the seed phrase. So the ledger lets you read out “its own seed phrase” and with this i can restore my wallet in case the device itself is damaged or lost? Thats good to know!

And the yubikey i can get as a 2fa solution

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12 thoughts on “Ledger, Yubikey and other HW Wallets – risk of failure”

  1. Seed phrase is everything. Keep it secure and you can restore your wallet into any new hardware and software one, anytime you want.

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  2. Yes and when you first get your hardware wallet set up, move over only a tiny bit to it then wipe it and restore it using the seed phrase to make extra sure you are able to recover it.

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  3. There’s no issue. Your portfolio is on the blockchain. Your hardware wallet is a key to access it. It doesn’t store your portfolio.

    If lost, stolen, broken, just buy a new device and restore. As others said, you’ll need your seed phrase.

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  4. >And the yubikey i can get as a 2fa solution

    You dont buy A Yubikey, you buy at least 2, if its important then 3.

    IF YOU LOSE YOUR YUBIKEY YOU LOSE THE ASSOCIATED ACCOUNT. There is no “I lost my Yubikey” to reset it. Only a centralized business can do this and that makes they Yubikey worthless if it can be social engineered out of the equation.

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  5. Yubico’s products (like Yubikey) are hardware authentication devices, which you use for accessing applications (including web ones).

    Ledger, Trezor, etc, are hardware wallets which allow you to operate on the supported blockchain from the wallet itself – you transact via the device.

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    If your Yubikey has a hardware failure – you are screwed. Solution: Have a back-up Yubikey which contains the keys for all your apps.

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    If you Ledger has a hardware failure – you are safe, as long as you have preserved your wallet’s seed phrases, and your wallet’s passphrases (if you have enabled that). Solution: have a robust seed recovery in place. Check Shamir’s Secret Sharing method (for anti-theft) and use durable, fire and water-proof seed storing solutions (check steel capsule or do-it-yourself solutions),

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  6. Like a software wallet, the wallet itself is not the single point of failure. Make sure to back up your seed phrase.

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  7. All you need to safeguard is your seed phrase. Your crypto lives on the blockchain and is not actually stored on these devices. Seed phrase is kinda like the soul while hardware wallets are interchangeable bodies, so its a matter of preference.

    Wishing you the best on your crypto journey.

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  8. As long as you have your seed phrase you can restore basically any wallet. Soft or hard, that seedphrase is what matters.

    As for something like a Yubikey, you can reset your 2FA by going through some processes. It’s shit and annoying but most places allow you to reset your 2FA.

    You can also setup a spare in relation to Yubikeys. Most app based 2FA also allow a backup

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  9. Seed phrase. The crypto isn’t actually stored on the wallet it’s on the blockchain. The hardware device gives you the key to access it on the blockchain. The seed phrase is like the password for your key. Lose your key? Just enter the pass phrase to restore it at anytime.

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