What happens to my Bitcoins if my Ledger wallet is lost? What happens if my Trezor wallet is broken? Does all of the coins stored in my wallet is lost forever? This is one common question among users who just bought a Ledger / Trezor and the ones who are planning to buy a new hardware wallet.
The answer is no. If you have the recovery seed phrase backup in place then you do not need to worry about the wallet being lost or broken. Ledger, Trezor, Keepkey and most other hardware wallets uses the industry standard BIP39 for mnemonic seed generation. Other than the hardware wallets there are many software wallets that support the BIP39 mnemonic recovery seed phrases.
Here is an article that has the complete list of BIP39 wallets. You can simply use any of these wallets, import the seed word generated by your hardware wallet and restore your funds.
Among those wallets one of the popular software wallet is Electrum which is a free, light-weight and open-source Bitcoin wallet. Anyone who is looking to recover their funds immediately from their lost / damaged hardware wallet can use electrum wallet.
Here in this guide we’ll explain how to import Ledger and Trezor mnemonic seed phrases into Electrum wallet. Similarly we’ll see how to import electrum’s 12 word seed into Trezor and Ledger. Also we’ll explain why it is not recommended nor it is secure to import a mnemonic seed into hardware wallets from software wallets.
But first let’s understand the importance of recovery phrase and when you’ll need it.
Mnemonic recovery phrase
When you are setting up Ledger, Trezor or any hardware wallet you’ll be provided with a random set of words. It is called recovery seed, or backup phrase and it can be either 12, 18 or 24 words. You’ll be asked to write down this backup phrase.
This 12, 18 or 24 word phrase generated by your wallet has all the information needed to completely recover your wallet. So it is very essential that you write down recovery phrase in a piece of paper and store it offline. Moreover the order sequence is very important.
In fact protecting your wallet recovery seed is more important than your device itself. But unfortunately there are many cases of users who have lost access to their cryptocurrencies just because they failed to properly backup / protect the recovery seed.
The importance of recovery seed
Technically your cryptocurrencies are not stored in your hardware wallet physical device. All of the coins and tokens remain on the respective blockchains. Your wallet just holds the key to access those cryptocurrencies. The 24 word mnemonic seed phrase is the master key for all your crypto.
In case if your hardware wallet device is stolen, lost or damaged you can use your recovery seed to regain access to all of your cryptocurrencies.
For example if you have Bitcoin stored on Ledger Nano S and if it gets lost or damaged, then you can import the recovery seed into Trezor One or Ledger Nano X and recovery your coins. Likewise you can import Trezor mnemonic seed into Ledger and vice versa. Instead of setting up a new wallet all you have to do is choose recover from seed option and enter the backup phrase. It will restore your wallet completely as it is.
But what if you don’t have an extra hardware wallet? As we said before hardware wallets uses the industry-standardized list of 2042 words. It is known as BIP39 and there are many software wallets that has the support for BIP39.
For example you can download electrum wallet to your computer and import the recovery phrase. But the thing is you must be very cautious when importing hardware wallet backup phrase into software wallet.
Here are few points to note before you import your hardware wallets mnemonic seed into software wallets.
Importing hardware wallet seed into software wallet
First of all electrum wallet has support for hardware wallets directly. If you are looking to simply connect your Ledger or Trezor with electrum then it is simple. Here is the guide.
Connecting hardware wallet to Electrum does not compromise any security. Even if the computer which you connect your device is infected with malware your keys will remain secure in the hardware wallet.
However if you are looking to import the mnemonic seed directly into electrum wallet then you must be very cautious and take proper measures.
Before we learn how to import Ledger and Trezor seed into electrum wallet here is something that you need to know.
Dangers of importing seed into software wallet
Software wallets are basically wallets that are installed on your computer. Most computers today are connected to the Internet and any wallet that is connected to the Internet are known as hot wallets. So basically most software wallets by design are hot wallets.
Hardware wallets on the other hand are known as cold wallets. These wallets store your keys offline even if you connect it to a computer that is connected to the Internet.
Hardware wallets holds your crypto keys safely within the device. Whereas software wallets, since they are connected online 24 x 7 they are highly vulnerable to attacks.
The most important rule is that you should never enter your recovery seed into anything other than the hardware wallet device. Especially you should not enter your hardware wallet recovery seed into software wallet that is connected to the Internet.
Moreover you should never take picture of your recovery seed. You should never type it in your phone or a computer. Also you should never upload the backup in cloud storage. All of these will put your coins at risk.
Therefore it is very essential that you keep your mnemonic seed phrase completely offline. This is why hardware wallets are designed for. So when use the software wallet?
When to use software wallet?
But what if you want to immediately use your coins. In this case you can import your hardware wallet seed into software wallet such as electrum. Once imported you can transfer the funds to your exchange account.
If you want to use your funds immediately then for the time being you can use software wallet. But do so at your own risk. Also if you want to test out how things work then for testing purpose you can import Trezor or Ledger seed into electrum. Other than this if you have a large amount of coins stored in your Ledger or Trezor then it is best to buy a new hardware device and import it.
Anyways let’s now see how to import / restore Ledger / Trezor wallet seed words into electrum wallet.
Import / Restore Ledger and Trezor seed into Electrum
First make sure to download and install the electrum wallet from official website.
If you already have electrum wallet then here is how to safely update electrum wallet.
Alright! Now that you have your electrum wallet ready follow the steps below to import your hardware wallet seed.
1. Go to file and click New / Restore.
2. Name your wallet and choose standard wallet.
3. On the next screen choose I already have a seed.
4. Now on the next screen before entering the seed, select options and choose BIP39 seed. If your hardware wallet is passphrase protected then also choose “Extend this seed with custom words” option.
5. Once done enter your 24 word seed phrase. The BIP39 checksum should return OK. Click next.
6. If you’ve selected extend seed with custom words option then enter your wallet passphrase.
7. Then on next screen you can let wallet detect existing accounts. Or if you know the address type you were using previously then you can manually choose the address type.
Finally encrypt wallet for extra security and click next. All your Bitcoin, the address used and transactions will be loaded into electrum wallet.
The above procedure is for Bitcoin. Now what about recovering Ethereum and other Altcoins that are associated with that seed word.
Multi currency BIP39 wallets
Electrum wallet is only for Bitcoin. If you wish to use Ethereum then you can import your hardware wallet seed into My Ether Wallet. https://www.myetherwallet.com/
If you wish to recover your altcoins then you can use multi currency wallets that has support for BIP 39.
Coins and Transactions not visible
So you’ve imported your Ledger, Trezor or Keepkey hardware wallet seed into Electrum or one of the BIP 39 compatible wallets. But you don’t see your balance or transactions yet.
Do not panic. First check your previously used Bitcoin address in block explorer to ensure all your coins are there. Once everything remains perfect then try importing a new wallet again.
You might have chosen different derivation path. So this time let the wallet detect your existing accounts. It will successfully restore your Ledger or Trezor accounts into electrum.
Alright! Now similarly can you import electrum 12 word seed into these hardware wallets?
How to import electrum seed into Ledger or Trezor wallet?
First of all why import electrum seed into Ledger or Trezor? Let’s say you were previously using electrum wallet and just bought a new hardware wallet. You now decided to move from electrum to hardware wallet.
To do so simply setup a new wallet on your hardware device and then transfer coins to the new address generated by your hardware wallet.
It is highly recommended to not use the recovery seed on hardware wallet that was generated from computer or any website.
Since such seed words are generated online it could have been compromised already. It simply defeats the purpose of hardware wallets which securely generates the key and stores it offline.
Moreover you cannot import the electrum generated 12 word seed phrases into Ledger or Trezor.
Even though Ledger and Trezor has support for 12, 18 and 24 word mnemonic seed phrases it does not accept the 12 word seed generated by the electrum wallet. You’ll get mnemonic invalid error message.
Electrum follows different standards and it does not use the BIP39 for wallet seed generation. Both Ledger and Trezor currently does not support electrum seed.
Also there are no private key export option on Ledger or Trezor.
So the only option and the only right way to move funds from electrum to hardware wallet is by transferring coins on chain.
Setup a new wallet on Ledger or Trezor. Make sure to backup the seed word offline. Then send all your coins to Ledger or Trezor from Electrum. Hope it helps.