Can I Recover My Hot Wallet on a Ledger?
|— Ledger enables you to recover any other wallet – or simply back up your existing Ledger device – by entering its seed phrase into your device. Doing this will recover all private keys associated with that seed phrase.|
— Sounds great right? A simple way to bring control of all your crypto assets onto your Ledger device. But there’s a catch: if you’re moving your assets from a hot wallet to a hardware wallet to secure them offline, simply recovering your assets using your seed phrase WILL NOT KEEP YOUR CRYPTO SAFE.
— Transferring your hot wallet accounts to the security of a Ledger device requires you to send each asset over to the Ledger – recovering your existing wallet is not an option and defeats the purpose of using Ledger to secure your crypto.
— Still not sure what we’re talking about? We have you covered! Here, let us explain how to move your existing crypto to safety with your brand new Ledger device.
Thinking of moving your crypto assets from a hot wallet into a shiny new Ledger? READ THIS.
Whether it’s coins, tokens or NFTs, Ledger’s central premise is keeping your crypto assets safe by generating your private keys in an offline environment – and keeping them there. Why is this so important? Because it keeps them out of reach of threats that exist online, such as hackers and malware. And there’s a good chance that when you buy your Ledger device, you’ll have some existing assets on another wallet that need to be to secured.
Doing this in the wrong way not only defeats the purpose of your device – it also leaves you wide open to online threats. Understanding how to move assets between wallets is crucial to staying safe. Here, take a deep dive into what it means to move assets from different types of wallet into your brand new Ledger, and how to complete that process in a way that keeps your crypto safe.
Back to Basics: How Crypto Wallets Protect You
“Owning crypto” is a deceptive phrase; really, what you own is the control of an address on the blockchain, and you own that via your private keys. Anyone who has these keys – or the related seed phrase – can access your address and anything stored there. The key takeaway? Your private keys and seed phrase MUST be kept secure if your crypto is to stay safe.
This is where crypto wallets come in. Their main purpose is to generate and secure your private keys, and keep them safe from threats.
How Hot Wallets Protect you
Different types of wallets offer different levels of protection. For example, a hot wallet may well conceal your private keys physically speaking, but since it’s always online, it remains vulnerable to attacks deployed via the internet, such as those hacks and malware we mentioned before. Once your keys or seed phrase have been online, even for a second, anyone might have accessed them. There is simply no way of knowing. So, in short, using a hot wallet to secure your private keys might keep them “out of sight”, but it fails to guarantee your crypto is secure from clever hackers who use your internet connection as a vector.
How a Hardware Wallet Protects You
This is why hardware wallets are a safer option. Like a hot wallet, they secure your keys and generate your related seed phrase. But unlike hot wallets, they do so in an environment that is completely offline: in other words, a place of reach for one of the main dangers, hackers. When you think about it, a hardware wallet seems non-negotiable. This is why so many people who already have crypto in a hot wallet eventually decide to secure their assets with a hardware wallet.
How to Move Your Crypto
Ok great – we’ve covered both types of wallet and their features. So what if you decide to move your assets from a hot wallet to a Ledger device?
Your Seed Phrase: Potential False Friend
Let’s go back a step. When you first create a crypto wallet, the first thing you’ll receive is your 24-word recovery phrase. This phrase is one of the coolest features of crypto ownership.
The private keys for everything you store on your wallet are derived from that seed phrase. Meaning it can be used as a backup, or master key for your crypto accounts. The phrase itself is in a standard format that is recognized by more or less every wallet – sort of like if all phones accepted the same type of charger cable – which gives you control by allowing you to access your crypto assets from anywhere. You can simply enter your 12 or 24 words on another wallet, and voila! – all your existing crypto accounts are back under your control! (We have the BIP39 Standard to thank for that – we talk more about that here, it’s pretty cool.)
Great, sounds easy enough – if you want to use a different wallet for your crypto assets, just enter your existing seed phrase. Right? But hang on just a second – that doesn’t really work when your intention is to secure your existing hot wallet assets on a Ledger device. In fact, it defeats the entire purpose of using the device.
Once Online, Always Online
The entire premise of a Ledger device is that it keeps your private keys completely offline. But the device can’t protect keys that were already exposed – for example, keys generated on a hacker-friendly hot wallet interface. So using your seed phrase to recover hot wallet keys (that were generated online) means the device can’t protect your funds: you don’t know who has already seen those keys, or even the seed phrase itself. Doing this may well recover your existing blockchain assets, but it won’t secure them.
In the digital age, we all know that once something goes online, it stays there – and your seed phrase and private keys are no different. It’s that simple.
We know what you’re thinking: when can I ever use the recovery function in that case? Great question. Recovering an existing wallet onto a new hardware device has important utility in certain instances. You may be using your device as a backup for an existing hardware wallet for example. In this case, it’s safe to use your seed phrase (provided you haven’t exposed it yourself by saving it on a connected device) to recover your accounts onto a new wallet. Neither the phrase itself nor any of the related private keys have ever been online. With that established, Ledger’s system can continue to secure your crypto by keeping these details offline.
How to Secure Your Hot Wallet Assets Using a Ledger?
If you’re looking to move your assets from a hot wallet to a Ledger, here’s the key message: move, don’t merge.
What do we mean by that? As you now know, from the moment your private key is generated on an online interface, there is no way of being sure it’s safe. So recovering those same private keys in a Ledger is not an option.
Instead, you MUST start a fresh account on your Ledger device for each of your assets. Sending each one over (yes, that means some gas fees) into its new account. This is the only way to be sure both your keys and seed phrase you’re using have never been compromised. With this done, you can switch off and be absolutely certain that your assets untouchable.
Can I Still Interact With dApps From My Ledger?
Even if you’re interacting with a platform that’s not yet integrated in Ledger’s ecosystem, don’t worry – we still have you covered. We’ll talk you through that right here.
Move, Don’t Merge!
Ledger’s most important contribution to your security is keeping your private keys and seed phrase offline. Ultimately, only you can make sure our system protects your crypto, by setting yourself up for success at the very start. So make sure you understand the risks, pay attention to detail and KEEP LEARNING! You’re the boss, and we’re here to help you get it right.
Knowledge is Power.
The best way to beat the scammers? Think like one. School of Block has you covered.