Guide HODL with HW

HODL and its origins are a source of confusion amongst the newer elements of the crypto community, with many people believing it to be nothing more than a misspelling of the word it pertains to; namely ‘holding’ your crypto rather than attempting to trade.
What is the origin of HODL?

The term HODL originates from a Bitcointalk post entitled ‘I AM HODLING’, written in 2013 back when Bitcoin was just $551 and, fittingly, crashing.

In the post, a drunken rant from forum user ‘GameKyubi’ complains about failing to take advantage of the volatile swings of the market. GameKyubi is aware that he is a bad trader and therefore his preference is to simply hold his BTC as an investment, as opposed to taking advantage of the market’s swings by trading it.

As is the wont of the Internet, other forum users quickly fixated on the misspelling of the title, responding with a series of quick-fire, increasingly irreverent memes.

And thus “HODL” was born.
The original post on Bitcointalk

And then this term of HODLing became related more and more with “storing” bitcoin with a HW (hardware wallet), something that you keep in there for long long time, large amount and don’t even think about to move it. So accessing your HW every day or every time you want to make a regular transaction doesn’t make sense. In another guide I explained how to manage your funds in “3 LEVELS of storing“: HODL – Cache – mobile/LN/spending

A hardware wallet, is just a device, containing a secured chip to store information and generate / use the private keys of a BTC wallet, not being connected directly to online world. Usually is like a USB thumb memory or a small device. These HW are useful for users that are not so techy and don’t want to bother too much with security combiantions, obfuscations, paranoia with air-gapped systems etc. There are many way to keep safe your BTC wallet, but this one is the simplest one.

REMINDER: We are talking here ONLY about Bitcoin and nothing else, no shitcoins, no other digital assets or whatever kittie-coin or promise of the “next Bitcoin”. Are ALL a fucking LIE! We do not waste time with those. ARE A WASTE OF TIME AND MONEY!

So, let’s deep dive a bit into this of storing bitcoin on a piece of hardware”.

A. Many are using this term “keep my bitcoins in a HW”.

Bitcoin NEVER leave The Bitcoin Blockchain. What users have in their hands are the keys to control their bitcoins. When you use a wallet app of hardware, actually that app or hardware is just an interface for your keys. Think about like you have a keychain and many keys, each key opens and control a BTC address. And those BTC addresses are sitting into a giant storage, with many boxes. In each box (wallet) you can have many BTC addresses. When you came to that giant storage facility (the bitcoin blockchain), you are the only one that have a master key that opens your box and also a key for each BTC address inside.

From here comes the famous quote: “NOT YOUR KEYS = NOT YOUR BITCOINS“. This is The Golden Rule of Bitcoin, REMEMBER IT!

That’s why we say: Never leave your bitcoins in an exchange, those are just banks, that controls your bitcoin keys. Those bitcoins ARE NOT YOURS!

So, what is doing this piece of hardware? Just controlling these keys in a way that the users do not have to concern about security and leaking information that can cause lost funds. Also the manufacturer is always updating the firmware (the internal software) with new functionalities. So keep in mind to update it.

Usually each HW have his own software interface to manage it, but many times is buggy or require to install extensions to browsers or aditional software that can be compromised with malware. So, the Bitcoin developers find an easy way to fix this “flaw”: create interfaces and tools directly into wallet apps that can “communicate” with your HW in a secured way.

B. Desktop/Mobile  applications that can connect directly with your HW.

There are quite some good applications out there and each one with his own functionalities, features, usage that each user can find useful for himself. But the important aspects when you choose a wallet are the following:

  • Easy connect your HW to the app interface and use it to sign transactions
  • Coin Control – it is an important feature when you are using in special the HW. I explained in another guide what is coin control.
  • Another important piece: SEGWIT support. Segwit is a new type of BTC address
  • LN (Lightning Network) compatible. it is an importante piece when you want to move funds from HODL to spending (LN) so you don’t have to pass through another additional steps.
  • XPUB, ZPUB control. Ways to control your master keys of your wallet.
  • CoinJoin, Mixing. Ways to obfuscate the “origins” and “destinations” of your BTC if those coins where obtain through a KYC process and can put in danger your privacy. Using a HW to keep coins that are marked as “KYCcoins”, doesn’t make sense.
  • Connect with your own BTC/LN node for better privacy
  • Fee control

Keep in mind: there are many wallet apps out there, but NOT all worth attention or are good to use. Keep away from those that are NOT open source, have bugs, not offering full control of your keys, no fee control, no large community acceptance and one aspect: multi-currency wallet apps in general are SHIT, from the beginning they are flawed, just by “touching the shitcoins”. There are more technical aspects to detail here, but no worth losing time to explain why not shitcoins, it’s obvious.

The most used and recognized as “good wallets” apps to use with your HW are the following:

Electrum (desktop) – https://electrum.org. Easy to use, coin control, almost all HW supported, LN support, xpub/zpub control

Video tutorial – How to use Electrum with a hardware wallet

Wasabi Wallethttps://wasabiwallet.io/. Privacy oriented wallet, CoinJoin by default, Coin control, connection to full node

Video tutorial – How to use ColdCard with Wasabi

Specter (desktop) – https://github.com/cryptoadvance/specter-desktop. Amazing interface to control all HW, through a connection to your own node for full privacy, coin control

Video tutorial – How to make multisignature wallets with HW and Specter

BlueWallet (desktop Mac/mobile) – https://bluewallet.io. Nice way to have a combination to manage funds from HW – desktop – mobile. Also Multisig and coin control, LN support.

Video tutorial – using Bluewallet with Cobo Vault HW

Sparrow (desktop) – https://www.sparrowwallet.com/. Advanced control of UTXOs (coin control), full node, electrum server

Green Wallet (desktop/mobile) – https://blockstream.com/green/. Multiplatform wallet, coin control, multisignature, easy to use

Video tutorial – how to use Greenwallet with HW

Mycelium (mobile) – https://wallet.mycelium.com/. Simple way to access your HW from a mobile device, using a USB dongle, connect your HW and sign.

Video tutorial – use mobile Mycelium with KeepKey HW

C. Hardware Wallets

There are many models, sizes, brands, technologies. Each one more or less fancy or secure or easy to access, interfaces. Also here there are some points to follow when you want to choose a HW:

  • How often you want to access it
  • Interface, connection (USB, bluetooth, wifi, SDcard)
  • Air-gapped, non-air-gapped
  • Plausible deniability, multiple wallets
  • Price, size, form, backup seed

Here we will present some of them, that are the most used. A detailed video tutorial playlist of HW, here.

Trezor – powerful HW with multiple functions and multi-wallet, small size, password manager

ColdCard – strong privacy oriented HW, small size

OpenDime – small USB device, like a USB memory that can keep in total offline mode your keys and also can be used as transferible proof of bitcoins. The most simple way to keep ofline your Bitcoin.

BitBox – SDcard air-gapped communication, small size, easy to use, swiss hardware

Ledger – most common one, easy to use, small size

Cool Wallet – credit card size HW wallet

A special HW wallet is for blind people – ICY wallet. Yes, somebody also think about blind people that should be able to use Bitcoin.

The list is very long, if you want to choose in more detail, here is a dedicated page with all types and specifications of hardware wallets.

The conclusion is: keep it simple, keep the balance between functionalities that you really need and price, usage desired. There are plenty of other video tutorials out there. Just search the desired HW to see how is done.

We do not offer any support for these HW devices, we do not sell anyone, we do not recommend anyone in specific. Each user have to choose the one that fits his needs and usage. We are just presenting them as options.