By the end of this lesson your hardware wallet will be set up, its backup written down and checked, and a small test payment received. You will also know why each step exists, so you can tell when something is wrong and stop before it costs you bitcoin.
A hardware wallet is a small device that creates and keeps the secret keys that control your bitcoin, and uses them only inside itself. Your computer or phone prepares payments; the device approves them. If you haven’t picked one yet, start with hardware wallets explained and our Ledger vs Trezor comparison.
What You’ll Need
- The device, still in its original packaging.
- A computer or phone with an up-to-date operating system.
- The backup card that came in the box, and a ballpoint pen (pencil smudges and fades).
- About an hour in a private room, including the tests at the end.
Before You Start
Check what arrived
Someone who tampers with a device before it reaches you can steal everything you later put on it. Your first protection is where you bought it. Buy from the maker’s own store if it delivers to you. Makers also list authorised resellers, but in October 2026 Ledger confirmed a hidden implant that copied the recovery words during setup in a device sold by one of them, CryptoBilis in Southeast Asia. If your device came from CryptoBilis, don’t set it up; read our CryptoBilis advisory. A marketplace seller you can’t trace is riskier still.
Then run the maker’s checks. They catch opened packaging and counterfeit devices, but not everything: no seal or app check can prove that nobody added hardware inside a genuine device, and the makers say so themselves. Each maker gives you a different way to check:
- Ledger: the Genuine Check in the Ledger Wallet app (formerly Ledger Live) confirms the device’s security chip is Ledger’s. Ledger says to run it on setup and not to use the device if the package looks opened or altered. It also says the check can’t detect added hardware, such as a spying implant, while the original chip is still in place.
- Trezor Safe models: a holographic seal covers the device’s USB-C port (check it before you peel it off), and Trezor Suite asks you to confirm that you bought from a trusted source and that the seal and package were intact. The device arrives with no software on it; Suite installs it and then checks that the security chip is genuine (Trezor’s setup guide).
- BitBox02: it comes in a clear vacuum-sealed bag with a grey pattern running along the sealed edges. Before you open it, look for cuts, tears, opened seams or signs of resealing; if you see any, leave it closed and contact BitBox. When you connect, the BitBoxApp runs an automatic Attestation Check that the device is genuine (BitBox’s packaging guide).
- Coldcard: it comes in a sealed, numbered bag with a numbered tear-off tab inside. Before you power it on, check the bag for torn seals, resealed areas or glue marks, and check that its number matches the device inside. If the bag looks compromised, don’t power it on; contact Coinkite. At first start-up, after you accept the terms, the screen shows the serial number, which must match the bag and the tab (Mk5 setup guide).
- Any other device: follow the checks on the maker’s own website.
Whatever the brand, three things mean stop and contact the maker: a backup card that already has words on it, a PIN supplied in the box, or a device that is already set up. Whoever wrote those words can empty the wallet the moment you fund it.
Get the app from the official website
Type the address yourself rather than clicking links in emails, videos, forums or search ads. Search results are full of copycat “setup” pages that imitate the official ones. Bookmark the real site once you’re on it. Fake companion apps and fake update prompts are among the commonest traps (The Scams That Empty Self-Custody Wallets), and Course 5 shows how to verify a download before you install it.
- Ledger Wallet: ledger.com
- Trezor Suite: trezor.io
- BitBoxApp: bitbox.swiss
- Coldcard has no app of its own: firmware comes from coldcard.com, and you pair it with sparrowwallet.com or electrum.org.
Make the room private
In a few minutes the device will show your backup words. Anyone who sees them, in person or through a camera, can take your bitcoin from anywhere in the world. Point webcams and phones away and stay out of view of windows.
Step 1: Connect and Update the Firmware
Firmware is the software that runs inside the device. Updates fix security flaws, so install any update the official app offers before you create your wallet. That way your backup is made by current, fixed software.
- Trezor: Suite installs the firmware for you during setup, because the device ships without any.
- Ledger and BitBox02: connect to the app, let it check the device and install any update it offers.
- Coldcard: it asks for a PIN first, because updates need one. Set it, stop at the main menu, and install the current firmware from a microSD card, as Coinkite’s setup guide for your model describes, before you choose “New Seed Words”.
Before you begin, look up your model in our security advisories. In November 2026, for example, a BitBox02 should be on firmware 9.26.5 or later.
Step 2: Create a New Wallet and Set a PIN
Choose Create new wallet (the wording varies). The other option, Restore, is for words you already have.
The device now makes your seed: a huge random number from which all your keys and addresses come. It makes it inside itself, away from your computer, because a computer runs many programs and any one of them could copy it. Makers gather the randomness in different ways. A Ledger uses a random-number generator inside its security chip; a BitBox02 mixes five separate sources. The goal is the same: a number nobody can guess.
Using a Coldcard, or a device that offers dice?
- In July 2026 Coinkite disclosed that older Coldcard firmware, on every model from the Mk2 onwards and going back to March 2021, made seeds that attackers could guess, and wallets were emptied. Current Coldcard firmware makes you add your own randomness (key presses, dice rolls or coin flips) before it creates the seed.
- If a Coldcard made your seed before the fix, even years ago, updating the firmware does not repair it. Run our two-minute Coldcard check and read the Coldcard advisory.
- On other devices, dice are optional and the normal setup is fine. If you do use them, follow our dice rolls guide: careless rolls can make a seed weaker, not stronger. The FAQ of Seed Phrases Explained says when they help.
Then set your PIN. Some devices ask for it before the words (Ledger, Coldcard), others after (Trezor; BitBox02 asks for a device password instead). The PIN stops someone who picks up your device from using it.
- Use at least 6 digits, or 8 if your device allows it. Avoid 1234, 0000, dates and patterns.
- Choose something you’ll remember. Too many wrong tries and the device erases itself: after 3 on a Ledger, 10 on a Trezor Safe 7 and 16 on other Trezor models. A Coldcard stops working for good after 13.
- Forgetting the PIN doesn’t lose your bitcoin, as long as you have the backup from the next step.
Step 3: Write Down Your Backup
The device now shows your seed as a list of words: your seed phrase, or recovery words. These words are your wallet. With them, anyone can rebuild it on any compatible device. Without them, a broken or lost device means the bitcoin is gone for good.
How many words you see depends on the device:
| Device | What it shows | How setup checks your copy |
|---|---|---|
| Trezor Safe 3, 5 and 7 | 20 words by default since June 2024: a Single-share Backup (SLIP-39 standard, its own list of 1,024 words) | Asks you to pick specific words from your list |
| Ledger | 24 words (BIP39 standard, a list of 2,048 English words) | Has you confirm the words on the device; on a Nano X you pick each of the 24 from a list |
| Coldcard | 12 or 24 words (BIP39), your choice | A quiz: positions in random order, three choices each |
| BitBox02 and BitBox02 Nova | 24 words (BIP39), saved by default to the included microSD card; you can choose to write the words instead, or show them later from the device settings | If you write them, you confirm the whole list on the device |
So if your Trezor shows 20 words, nothing is wrong. Write all 20.
- Write each word in its numbered slot. Order is part of the secret. Like a phone number, the same digits in a different order reach someone else.
- Copy the spelling exactly as shown, in clear capitals. One wrong letter can make a different word.
- Check each word before moving on. Some devices don’t let you go back.
BitBox02 with the microSD backup: the card holds your whole wallet in a file that is not encrypted, and your device password doesn’t protect it. Anyone who gets the card can take your bitcoin. Remove it after setup, keep it private and away from the device, and only ever put it into your BitBox, never into a computer, phone or camera. Cards can also fail, so consider writing down the words as well; the device can show them later from its settings (BitBox’s backup guide).
Apart from that card, never put your words into anything digital: no photo (photos sync to the cloud), no typing into a computer or phone, no notes app, password manager, email or message. Each digital copy is one more place someone can steal them from. Some Ledger models also come with a Recovery Key card; Ledger says it works alongside the paper sheet, not instead of it.
Where to keep the words, and when to move them onto metal, is covered in seed phrase storage best practices.
Step 4: Pass the Device’s Check
Before it finishes, the device asks you to prove your copy is right (see the last column of the table). Take it seriously. If you wrote “grape” where the screen said “grace”, this is where you find out, rather than years later when you need the backup.
If it fails, check the words you entered against your paper, one by one, and try again. If you can’t find the mistake, start over: no money is at risk yet.
Step 5: Connect the App and Add a Bitcoin Account
The device can’t see the Bitcoin network. The app on your computer or phone shows your balance, creates receiving addresses and broadcasts payments. Think of a cheque: the app fills it in, but only the device can sign it, and it shows you what it’s signing first.
| Device | Maker’s app | Other wallets that work with it |
|---|---|---|
| Ledger (Nano, Flex, Stax) | Ledger Wallet (formerly Ledger Live) | Sparrow, Electrum |
| Trezor (Safe 3, 5, 7) | Trezor Suite | Sparrow, Electrum |
| Coldcard (Mk4, Mk5, Q) | None | Sparrow, Electrum |
| BitBox02 | BitBoxApp | Sparrow, Electrum |
Before relying on another wallet, check that it lists your exact model. On a Ledger, the app also installs the Bitcoin app on the device, which Ledger needs before it can use bitcoin. A Coldcard can stay air-gapped: it never plugs into the computer, and data moves by microSD card or QR code. Our Coldcard Mk4 setup guide walks through that, and the Electrum lesson covers Electrum. If you use Electrum, make sure it is version 4.8.3 or later: older versions connected to someone else’s server have an open security advisory.
Step 6: Receive a Small Test Payment
In the app, click Receive. It shows a receiving address, a string usually starting with “bc1”, where bitcoin can be sent to you. Bitcoin Address Types and Derivation Paths explains what those first characters tell you.
Now check the same address on the device’s own screen, character by character. Malware on your computer can swap the address on your monitor for a thief’s. It can’t change what the device displays. If the two don’t match, don’t use that address: your computer is compromised.
Send a small amount you could afford to lose. Wait until it has at least one confirmation, meaning a miner has included it in a block (usually within an hour, depending on the fee paid). Then you know the address, the app and the device all work together. Funding it from an exchange? Your First Withdrawal covers the network choice, minimums and fees, and what to do if the payment seems stuck.
Step 7: Test Your Backup Before Adding More
The check in Step 4 may test only a few words, and it comes right after you wrote them, while they’re fresh in your memory. Before you move real savings, prove that the paper itself (or the BitBox card) can rebuild the wallet. Do it in this order.
First: the built-in check (nothing is erased)
You enter the words from your paper on the device, and it tells you whether they match the wallet it holds:
- Trezor: Check backup in Trezor Suite’s device settings. On the older Model One (no longer sold), you type the words in Trezor Suite on your computer, in the order the device asks for, unless you choose Advanced recovery, which keeps them hidden from the computer.
- Ledger: the Recovery Check app, installed from Ledger Wallet.
- BitBox02: if you wrote the words, verify them from the device settings; if you kept the microSD card, run the backup check, which reads the card in the BitBox without a reset.
- Coldcard (Mk4 and later): enter the words as a temporary seed. If they’re right, the device refuses, because they’re already its main seed: the screen is titled FAILED, but the message says it can’t use the master seed as temporary (since the February 2025 firmware it adds that you have just successfully tested recovery of your master seed). If it won’t let you enter one of your words, a word is wrong. If it accepts them, your paper opens a different wallet: choose Restore Master, at the bottom of the main menu, to go back to your own.
Then, optionally: a full restore
Only after the built-in check passes, restore the wallet from paper. Use a second hardware wallet that accepts your kind of backup (a Trezor 20-word backup needs another Trezor or another SLIP-39 wallet such as Keystone; a BitBox microSD card needs a BitBox), or reset your own device and choose Restore. Type the words on the hardware wallet, never into a phone or computer wallet. Check that the same first receiving address appears and the test payment is there. Then set your PIN again. On a Coldcard the reset is Destroy Seed (Advanced/Tools, then Danger Zone, then Seed Functions): your PIN stays, and you restore with Import Existing. Destroy Seed also erases the Coldcard’s settings, multisig wallets and Trick PINs. Only a Coldcard backup file brings those back, so once you’ve set any of them up, keep to the temporary-seed check. Nuke Device, in the same Danger Zone menu, makes the Coldcard unusable for good.
Why this order? Wiping your only device before you know the paper is right could lock you out of the test payment, or of more. If anything fails, keep the device as it is, find the mistake, and if you can’t, move the funds to a new wallet with a fresh, checked backup. Our guide on how to test your seed phrase backup has the details.
Common Mistakes
- Tapping through the word check without comparing it with your paper.
- Skipping the backup test. Until you test it, you’re trusting the paper, not knowing it works.
- Using a seed made on a computer, or typing your words into one. Let the device create the seed.
- Keeping the words next to the device. One theft or fire then takes both. Store them in different places.
- Buying from a marketplace seller. Buy from the maker’s own store if it delivers to you. If it doesn’t, use a reseller listed on the maker’s website and check our security advisories for that reseller first. See our hardware wallet buying guide.
Using It Day to Day
- To receive: click Receive in the app, check the address on the device screen, then share it.
- To send: create the payment in the app. The device shows the destination address and amount; check both on its screen, then approve on the device.
- To see your balance: many apps show it without the device connected. You need the device only to approve payments.
Your keys never leave the device. The app sends it an unsigned payment, the device signs it inside, and only the signed payment comes back. To see how this compares with keeping bitcoin in an app or on an exchange, read cold vs. hot wallet security. Two optional layers can come later, once your words are stored and tested: a passphrase, explained in Seed Phrase Storage, and, for large savings, multisig, taught in Course 5 (multisig wallets explained; see also Three Keys From the Same Vendor Are Not Multisig and our 2-of-3 multisig setup guide).
Frequently Asked Questions
What happens if I lose the device?
Your bitcoin isn’t inside it; it’s recorded on the blockchain, and the device only holds the keys. Restore your backup on a new device. BIP39 words work on most hardware wallets. A Trezor 20-word backup restores on another Trezor and on wallets that support SLIP-39 (Trezor lists the Keystone hardware wallet among them). See what a Bitcoin wallet actually is.
What if I forget my PIN?
After too many wrong tries the device erases itself (or, on a Coldcard, stops working). Restore from your backup on a reset or new device. The PIN protects the device; the backup protects your bitcoin.
Is a used hardware wallet safe if I reset it?
No. A reset clears the wallet, but it can’t prove nobody modified the hardware. Ledger, for example, notes that its Genuine Check can’t detect physical changes to a device whose original security chip is intact. Never buy second-hand: buy new, from the maker’s own store, or, if it doesn’t deliver to you, from a reseller the maker lists on its website.
How long does setup take?
Around 30 minutes for the device, plus time for the test payment to confirm and for the backup test. Plan an unhurried hour.
Check Your Understanding
1. Your new device arrives with a recovery card that already has words written on it. What does that mean, and what do you do?
Answer
Someone else knows those words, so anything you put in that wallet could be taken. Don’t use the device or the words. Contact the maker and ask for a replacement. A genuine device always makes new words for you during setup.
2. Why check the receiving address on the device’s screen when the app already shows it?
Answer
Malware on your computer can replace the address on your monitor with a thief’s. It can’t change what the hardware wallet displays. If the two match, the address really belongs to your wallet.
3. You want to test your backup. Why start with the built-in check instead of wiping the device and restoring?
Answer
The built-in check compares your paper with the wallet on the device without erasing anything. If your paper has a mistake, you find out while the device still holds the wallet and can fix it. Wipe first, with a wrong paper, and you could lose access to the funds.