# Setting Up a Hardware Wallet Without Losing the Recovery Phrase

> The device is the easy part. These eight steps are about the twenty four words, which is where people actually lose money.

- Source: https://thecoinworkbook.com/setting-up-a-hardware-wallet/
- Published: 2026-07-24
- Author: Gabriel Mas
- Publication: The Coin Workbook — Do it once, with the steps written down
- Topic: custody
- Tags: custody, wallets, backup

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Setting up a hardware wallet takes twenty minutes. Nineteen of them should be spent on the recovery phrase.

## Step 1: buy from the manufacturer

Order directly from the maker, not from a marketplace. Tampered devices are a real category of theft and a sealed box from a reseller proves nothing.

## Step 2: check the device is uninitialised

A new device generates its own phrase during setup. If a phrase arrives printed in the box, the device is compromised. Stop and return it.

This has happened often enough to be a standard warning in every manufacturer's documentation.

## Step 3: let the device generate the phrase

Follow the on-screen setup until it displays a sequence of words, usually twelve or twenty four. These appear on the device screen, never on the computer.

If any software asks you to type the phrase into a browser during setup, close it. That is not part of any legitimate setup.

## Step 4: write the words on paper, in order

Numbered, in order, legibly. The order is part of the secret.

Do not photograph them. Do not type them anywhere. A photograph is a file and files are backed up to places you do not control.

## Step 5: verify the backup on the device

Every device offers a check that asks you to re-enter selected words. Do it.

**This step cannot be done later.** If the words were written down wrong, this is the only moment you will find out while it still costs nothing.

## Step 6: store it somewhere that survives you

Two copies in two places, both of which survive a fire and neither of which is your desk drawer. A sealed envelope with a trusted party or a bank box both work.

The failure modes here are fire, flood, theft and forgetting, in roughly that order of frequency.

## Step 7: send a test amount

Small, then confirm it appears. [Somewhere the test transaction is cheap enough to bother with](https://collectnexchange.cy/services/crypto-offramp) makes this step trivial.

## Step 8: practise a recovery before you need one

Wipe the device and restore it from the written words. This proves the backup works.

Doing this once, deliberately, is the difference between a backup and a hope. [A platform where each step tells you what happens next](https://collectnexchange.cy/) is worth using for the funding side while you learn the custody side, and [Collect & Exchange](https://collectnexchange.cy/services/crypto-custody) holds balances for the part you are not ready to self-custody yet.

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This article explains how something works. It is not financial advice.
Canonical HTML version: https://thecoinworkbook.com/setting-up-a-hardware-wallet/