Don’t Panic. If your hardware wallet breaks your Crypto assets are still protected. By using your Seed Phrase you can still recover access to all of your coins. Here are some best practice steps to take to ensure their safe recovery.
You’re Protected by your Seed Phrase
Remember, your coins are not actually stored in your wallet. The wallet simply controls access to your coins and is protected by your Seed Phrase.
As long as you have your Seed Phrase (sometimes called Recovery Seed) then you simply set up another wallet, enter your seed phrase and regain access.
Best Practice when your Hardware Wallet is Broken
Do Not Throw it away, yet!
Hang on to your damaged hardware wallet until you have completed the process of recovery and maybe even generate a new Seed Phrase.
Choose a replacement wallet:
Either mobile, software or hardware.
If changing the type/version then double-check compatibility.
Recover to New wallet;
Using your Seed Phrase follow the wallets instructions for ‘Recovering’ or ‘Recovery Process’
Access restored, trade as normal.
Consider generating a new Seed Phrase and/or having Spares
What to do when you break your Hardware wallet
If you have broken your hardware wallet we are going to assume that you still have the hardware, even if it is no longer useable. You, therefore, do not need to worry about someone trying to hack into it!
Even if you do not care if the physical device can be used again, it is best practice to protect it from any potential hacking. You do that by keeping hold of it, until you have recovered your crypto AND protected all your assets with a new seed phrase.
If, however, the hardware has been damaged but is also lost (‘the glass was smashed so I threw it out!’) then you may prefer to read our other guide, about lost hardware wallets, with more focus on being hacked.
How quickly do you need access to your crypto?
So, your crypto is safe, your next steps depend on how quickly you need to access it?
- If you are simply HODL’ing
- or if you have some important trades that you want to make straight away
No Rush, I’m HODL’ing.
Your crypto is safe and you do not need access immediately.
You are then able to buy a new hardware wallet, even if it takes a few days to arrive.
If your damaged hardware is BIP39 compatible then you can maybe even choose to buy a different or upgraded wallet. (Check exact compatibility, see more below)
Immediate Access to your Crypto.
If you are unable to wait then you will want to ‘recover’ your Crypto to another wallet. The fastest will be to recover to a software or browser-based wallet, unless you have another hardware wallet available.
If the damaged wallet was BIP39 compatible (most of them are) then you may be able to recover your assets to a BIP39 compatible mobile, software, or browser-based wallet.
You will then be able to trade your crypto instantly.
This does, however, mean your assets are ‘at slight risk’ online until you are able to return them to a ‘cold’ hardware wallet. That is the price of not waiting for another hardware wallet. If this is a potential issue going forward then I would definitely suggest investing in some spares.
For complete confidence, it would then be good practice to create a new seed phrase for all your assets.
NOTE: You should check that the new wallet you plan to use is both exactly compatible and can accept all of the coins that you have stored on your hardware wallet!!
List of BIP39 compatible Wallets
What is BIP39?
BIP39 is simply a widely accepted method by which wallets generate a seed phrase.
The method allows a wallets software to use algorithms in order to generate a seed phrase, usually 12 or 24 words. That phrase can then be translated by other BIP39 wallets to regenerate the addresses and private keys of that wallet.
As the method is widely used it is often possible to recover your BIP39 hardware wallet to other BIP39 wallets without being locked to one manufacturer.
The BIP39 name comes from ‘Bitcoin Improvement Proposal No. 39’
HOWEVER: There are other seed phrase creation methods (e.g Electrum) and different derivation paths so it is necessary to ensure your intended new wallet type is exactly compatible!
- It seems that some manufacturers may have utilized the BIP39 method but in a slightly different way! They may have used a different derivation path. In these scenarios, it is possible that your seed phrase will not allow you to recover to a different device. Even if they are both BIP39!
To check the derivation paths of common hardware wallets check here: https://walletsrecovery.org/
- It is also possible that the intended wallets do NOT offer the ability to work with ALL the same coins. Having found a wallet with a suitable derivation path then check it can receive your coins!
My Wallet isn’t exactly Compatible! What do I do!
In these scenarios, the best thing is to try and order the exact same version of the hardware wallet as your currently damaged version. You can then recover in the normal way.
Indeed, you might want to buy two (see Spares below) or alternatively once you have recovered access you may look to move your crypto to a more widely compatible wallet.
In most cases, even with the rapidly changing format and options, manufacturers are aiming to make their devices backward compatible. This means by sticking with the same manufacturer, an upgraded version of your wallet should be compatible with an older version. But no guarantees!
Getting a New Wallet
So now to some good news!
Having damaged your existing wallet, it does not mean you have to buy the same hardware wallet again!
The hardware market is evolving rapidly and new features and security options are being included all the time.
The crypto world is still young. The establishment of ‘basic criteria’, user-friendliness, and compatibility/access with all coins, blockchains, operating systems, and other wallets has not yet been achieved.
We were quite surprised at how limiting the current wallets were when we drilled down to review their features. Check out our review here.
NOTE: You should check that the new wallet is both exactly compatible and can accept all of the coins that you have stored on your hardware wallet!!
Creating a new Seed Phrase
A new Seed Phrase is the final cautious step you can take before throwing away a damaged hardware wallet.
The easiest way is to temporarily transfer your assets first to a mobile or software wallet, as suggested if you lose or damage your wallet and need instant access.
When you then set up your new hardware wallet rather than restoring your existing seed phrase onto the new wallet, you generate a new seed phrase.
You can then transfer from the mobile / software wallet onto the new hardware wallet with its new Seed Phrase.
Note: This does mean your assets are ‘at risk’ online until you return them to a ‘cold’ hardware wallet but only for a short period of time.
It is possible to achieve the same thing with a single hardware wallet without ever using your Seed Phrase online, but it is a slightly more drawn-out process. It requires copying Private Keys and Public addresses and has the potential for user typo errors!
Peace of Mind through having Spares
Having a backup is a well-known method for maintaining peace of mind.
Same Seed Phrase
It is possible to have the same Seed Phrase on two devices. You can therefore keep one safely stored for emergencies whilst having the other for regular use.
If one is damaged you can use the other for immediate access.
Or you might have one for use at the office and one for at home so you do not risk damage, theft, or loss whilst moving locations.
Two Different Seed Phrases
You split your crypto portfolio in any number of ways across the two devices.
One for daily transactions, that stores a small percentage of your assets. One for the bulk of your assets kept in a safe.
Safely create a New Seed Phrase as required.
Your wallet can generate an unlimited number of seed phrases. If you ever feel that your current seed phrase has been compromised you can generate another one.
If you Reset one of the hardware wallets it will generate a new Seed Phrase. You then transfer all your assets from the original wallet with the old Seed Phrase to the wallet with the new Seed Phrase.
NOTE: This same process can be achieved with a single working wallet but requires copying Private Keys and Public addresses and has the potential for user typo errors!
Protect your Seed
All of this still relies on you looking after your seed phrase. Whoever has the seed phrase, has access to all the crypto stored in that wallet!