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How to send bitcoin to a hardware wallet

If you bought any bitcoin recently, you likely used a mainstream exchange like Coinbase, Kraken, or Gemini, to name just a few. And if your bitcoin wallet (the file that stores your access codes) lives on the exchange where you bought the coins, you are entrusting the security of your coins to that exchange site.

That can be risky. Even Coinbase, the most mainstream brokerage for buying bitcoin, now with more than 13 million customers, is vulnerable. If someone obtains both your Coinbase password and your phone or phone number, they can take over your account and steal your coins by sending them elsewhere.

What’s a hardware wallet?

The best practice for keeping your coins safe is to move them offline. That practice is called “cold storage,” because you keep your access keys to your coins somewhere not accessible to an internet connection (i.e. not “hot”).

One popular cold storage option is to move the coins onto a “hardware wallet.” These are physical devices that carry encryption and exist purely to store your wallet file. Your coins are far safer from theft if stored offline.

There are a number of hardware wallets on the market these days; some of the best known are KeepKey ($130), Trezor ($106), and Ledger ($68). Each device looks a little different, but they all connect to your computer via the USB port, using a cord. (Ledger resembles an actual USB stick, though it doesn’t plug directly into your computer.)

How do I send coins from Coinbase to a hardware wallet?

So, how do these work? As a demo, we tried one out, the Ledger Nano S. It’s simple, relatively quick, and requires no advanced technical understanding.

Ledger Nano S, plugged into an Apple laptop. (Daniel Roberts/Oath)
Ledger Nano S, plugged into an Apple laptop. (Daniel Roberts/Oath)

When you first plug in the Ledger Nano S, its screen welcomes you in neon blue text and explains how the only two buttons on the device work: click left or right to move back or forward through menus, and click both at the same time to confirm a menu selection.

Then it asks you to choose a four-digit passcode. This passcode is only for use on the physical device, but the device will prompt you for it every time you plug in, and every time you re-open the Ledger screen on your computer, too.

Next, Ledger displays for you a 24-word recovery phrase and encourages you to write it down (offline!) and store it somewhere safe. Ledger comes with a custom card for writing down your recovery phrase, but you don’t have to use that—wherever you write down the words, the key is not to lose it. This is really important: if you ever lose the physical Ledger device, you can still access your coins if you have our 24-word recovery phrase. After you confirm you’ve written down your recovery phrase, Ledger will then test you to make sure you have your phrase down, by asking you to select, for example, the ninth word from your recovery phrase.