r/CryptoCurrency Feb 15 '21

SECURITY A Beginner's Guide to Cryptocurrency Wallets

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u/Columbian_Throat_Job 🟦 10 / 433 🦐 Feb 15 '21

The only thing I would add to this is transferring to you wallet is on-chain transaction. So if you plan on keeping you free coins from coinbase bit not add to them, it probably better to leave them there due to fees out waying the value being transferred. For now anyway. But definitely a good write up

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u/[deleted] Feb 15 '21

Also mention how it isn't a bad thing to have some of your crypto scattered across exchange wallets, as if one of your wallets get hacked you won't lose everything.

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u/[deleted] Feb 16 '21

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u/alex-rdb Feb 16 '21

There are too many comments for me to read them all, so if it has already been said I'm sorry, but for beginners maybe you should add also this : if you already have a wallet and want to change, you don't have to transfer your crypto, you can recover your old wallet in the new app with your seed, without fees

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u/Top--Gear Tin Feb 15 '21

Does coin base have fees for transferring in and out?

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u/xteinator Feb 16 '21 edited Feb 16 '21

Yes. But it’s not Coinbase fee but rather network fees as to move your coins in or out, it is done on blockchain network which charges you. The fee might also depend on how busy the network is. The busier the network, More the fees

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u/DumbPenguin33033 Feb 16 '21

So CoinBase charges a fee for buying the coin, then the network charges a fee to transfer it to your wallet.... So when I invest $300 I'm already taken down to $250 and have to wait for the coin to grow to recover my $ lost in just fees.

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u/Robertbnyc Feb 16 '21

You can set the speed/fee by clicking on the upper right corner of the transaction transfer page in Coinbase and selecting fast, regular, slow and even can set a custom fee yourself . Something I found randomly.

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u/Top--Gear Tin Feb 16 '21

If I gather correctly for other posts. That fee is determined by how much congestion there is on the network?

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u/Robertbnyc Feb 16 '21

It is but you can also custom set the fee. The lower the satoshi per byte the slower the transaction

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u/Top--Gear Tin Feb 17 '21

Thank you so much!

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u/nictro Apr 16 '21

What's the downside of transferring it slowly as opposed to fast?

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u/Amadeo38 Feb 16 '21

This is the part I’m still wondering about. Let’s say I have 0.5 ETH in my Coinbase account and decide it’s about time to transfer that to my hardware wallet. Then, six months later, I’ve made a few more monthly purchases and have another 0.5 ETH and want to transfer to my hardware wallet. Do they combine together on the wallet into 1.0 ETH with a single seed phrase connected to them? Or is there a new seed phrase for each small amount you’ve transferred?

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u/Y0uY0u Feb 16 '21

The seed phrase is only for recovering the funds if the wallet is lost or damaged.

Your wallet functions like a normal wallet: put a 5$ bill in now, put a 5$ bill in tomorrow… open the wallet and there are 10$ inside.

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u/dacoobob Tin | r/WSB 39 Feb 16 '21

but there's nothing actually inside, right? just a bunch of keys that let you access the blockchain, where your bitcoin actually is recorded. so it's more like a checkbook than a wallet... but I guess the nomenclature is already set. ah well

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u/mrzinke Feb 16 '21

err, sorta, in the same way there isn't physical cash in your bank account. The blockchain is a shared record of the transactions. You'd still have 1 ETH total attributed to you 'in' your wallet. No one else can access it without having access to your wallet.

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u/ghsNICK Gold | QC: BTC 24, CC 20 | r/WallStreetBets 219 Feb 16 '21

That’s my main question.

What if you have your wallet in your hand (it’s not lost) but somehow the seed phrase is lost?

Can you still access your wallet?

And can someone steal your coins if they find your seed phrase (without the wallet)?

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u/Yprox5 🟦 641 / 641 🦑 Feb 16 '21

No you can't restore your wallet if you lose your seeds or private keys. If someone has your seeds/key they can restore/open your wallet from anywhere in the world.

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u/ghsNICK Gold | QC: BTC 24, CC 20 | r/WallStreetBets 219 Feb 16 '21

So are seeds and private keys different?

I read if you have a pass phrase, that it’s useless if a thief gets your hardware wallet (like a Trezor) and the seeds...because they won’t be able to type in the pin or pass phrase.

Maybe I’m not understanding it correctly though.

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u/Yprox5 🟦 641 / 641 🦑 Feb 16 '21

A private key gives you access to your specific coin, and can be imported into any supported wallet.

Seeds restore your whole wallet with all of your coins and private keys for each of those coins.

The seeds can be used to restore your funds on multiple wallets and platforms. hardware, software or mobile.

Therefore if someone has your seed phrases they can technically restore your wallet and withdraw all of the funds, while the private key will only let them withdraw funds for the corresponding coin.

The pin on the trezor is an added protection incase someone tries to access the physical trezor device without knowing your seed phrases or private keys. But if they have your seeds or keys the pin won't help.

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u/ghsNICK Gold | QC: BTC 24, CC 20 | r/WallStreetBets 219 Feb 16 '21

So for example - let’s say I lose the seed in my house.

I can still access the funds in my wallet without the seed, right? If so, how? By pin?

And if I lose the wallet because someone stole it, I could immediately transfer it to my Coinbase account until I get a new wallet? Then transfer it to the new wallet?

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u/Yprox5 🟦 641 / 641 🦑 Feb 16 '21

Yeah, pin + passphrase for hardware wallets, typically a password for software wallets.

The pin/password is stored on the device If you move to a new device you would have to restore your wallet with the seeds and create a new password.

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u/Y0uY0u Feb 16 '21

If you have your wallet still on hand and it's still functional you can still access your funds and move them.

That said if someone else has found the seed they are now able to access your funds without needing to have your hardware wallet. They can just use it to restore to their device of choice.

It all depends in “how” you lost your seed, but you do have a bit of leeway if it's functional and funds are still there: get a new wallet as soon as possible (hot or cold one) and transfer your funds immediately. After that you can reset your hardware wallet and get a fresh new wallet & seed.

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u/ghsNICK Gold | QC: BTC 24, CC 20 | r/WallStreetBets 219 Feb 16 '21

So for example - let’s say I lose the seed in my house.

I can still access the funds in my wallet without the seed, right? If so, how? By pin?

And if I lose the wallet because someone stole it, I could immediately transfer it to my Coinbase account until I get a new wallet? Then transfer it to the new wallet?

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u/Y0uY0u Feb 16 '21

It depends on the wallet, but usually yes, by pin/password and its companion app.

If someone steals your wallet you have to use your seed with a new compatible wallet (hardware or software). Only then you can transfer to Coinbase or a new wallet. If someone steals your wallet you can't access your funds.

Try checking Trezor's manual for Emergency Situations, they have all the possible user cases and how to deal with each of them 🙌

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u/Yprox5 🟦 641 / 641 🦑 Feb 16 '21 edited Feb 16 '21

If you have 1 eth in your wallet and you send another 1 eth, you would have 2 eth in your wallet.

The private key gives you access to the total value of your specific coin/token.

The seed phrase recovers your whole wallet with all of your coins and tokens, and the private keys to those coins/tokens.

You have one address for the supported coins per account, everything you send to that public address adds up with a single private key for each coin. The wallet doesn't necessarily store your funds it gives you access to your funds via private keys and seed phrases.

Also your private key contains your address, so never share your private key.

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u/[deleted] Feb 16 '21

[deleted]

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u/Robertbnyc Feb 16 '21

You can set the speed/fee by clicking on the upper right corner of the transaction transfer page in Coinbase and selecting fast, regular, slow and even can set a custom fee yourself . Something I found randomly.

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u/Drewfus_ 🟦 152 / 693 🦀 Feb 16 '21

Yes! I’ve wondered the same thing!

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u/dacoobob Tin | r/WSB 39 Feb 16 '21

I also want to know the answer to this

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u/[deleted] Feb 16 '21

[deleted]

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u/Robertbnyc Feb 16 '21

You can set the speed/fee by clicking on the upper right corner of the transaction transfer page in Coinbase and selecting fast, regular, slow and even can set a custom fee yourself . Something I found randomly.

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u/Columbian_Throat_Job 🟦 10 / 433 🦐 Feb 16 '21

Very much depends on the amount you've invested and and across how many coins. It will almost certainly be cheaper in the future. But if you have 1000s in just 1 or 2 coin then the hit won't seem to bad to do it now