How to replace or upgrade a bitcoin hardware wallet

You might think of hardware wallets as the secure offline devices you use to store bitcoin, but technically they are the user interface for your seed, allowing you to sign bitcoin transactions using the keys produced by that seed. As with anything, things can go wrong. Sometimes your hardware wallet gets lost in a boating accident, destroyed in a fire, or stolen at the threat of a $5 wrench. These devices also aren’t made to last forever—sometimes, you just need to upgrade to a newer device.

As we covered in our high-level look at seed phrases and how they work, seed phrases are device-agnostic as long as you’re using a wallet made by a company that correctly implements the BIP39 standard. If you have one of these devices and your seed phrases are secure, you can recover access to your funds in quick order in just about any situation.

Replace or upgrade a bitcoin hardware wallet

Replacing or upgrading hardware wallets is simple, but there are two possible scenarios, and you need to follow the instructions for the correct one.

• First scenario: You are certain that your seed and wallet haven’t been compromised. E.g., you hold the only copy of your seed phrase and just want to upgrade to a new hardware wallet.
• Second scenario: You suspect that your seed phrase or wallet has been compromised. E.g., your hardware wallet was stolen or lost.

We’ve included a guide below for each scenario.

Not compromised: Your hardware wallet is broken, dated, or buggy

The simplest hardware replacement scenario is if your seed and wallet haven’t been compromised, but you simply need to upgrade or replace the wallet. This is you if a button or touchscreen has stopped working, you forgot your PIN, or if you simply want to move from a device that doesn’t have a specific feature—like a USB-C port or a touchscreen—to one that does. This is also you in the uncommon event that your hardware wallet randomly wipes your seed during a firmware update or some other error occurs that makes it unusable.

1. Acquire or reset a replacement device

In this case, you simply need to acquire a new hardware wallet that supports a BIP39 seed phrase and restore that seed phrase to the new wallet. This can mean moving from a Trezor One to a Trezor Model T, a Trezor Model T to a Ledger Nano X, a Ledger Nano S to a Coldcard, or any other wallet that supports BIP39 seed phrases.

If you just need to reset an existing device because of a random seed wipe or you have an old wallet that you want to wipe for this purpose, simply follow the manufacturer’s instructions to perform a factory reset. If you’re using a previously-used wallet, check very carefully that no addresses associated with that wallet hold any funds before following the relevant guide:

• Trezor: Wiping the device
• Ledger: Reset to factory settings
• Coldcard: Destroy seed
• or other hardware wallet documentation

2. Follow manufacturer instructions for seed phrase recovery

Once you’ve acquired the new hardware wallet (or factory reset an old one), simply follow the manufacturer’s instructions for restoring an existing seed to the wallet.

The various wallet makers use different language to refer to this recovery process, but manufacturers’ actual steps are very similar. Find the instructions specific to your device at their respective website:

• Trezor: Recovery
• Ledger: Restore from recovery phrase
• Coldcard: Importing or creating private keys
• or other hardware wallet documentation

It’s worth noting that not all hardware wallets use BIP39 for seed phrases, and even the ones that do sometimes don’t do so in a standard way or don’t document their backup and recovery processes. WalletsRecovery is an excellent resource to learn more about various wallets and their external recovery practices.

We recommend Trezor, Ledger, and Coldcard to our clients here at Unchained Capital. All three of these manufacturers are fully interoperable when restoring bitcoin seed phrases.

3. Continue with bitcoin security best practices

After you’ve successfully recovered your seed phrase on your hardware device, you should continue to secure your wallet and seed phrase as usual. That’s it; you’re done!

Compromised: Your hardware wallet is lost or stolen

If your wallet was lost or stolen, the replacement process is a little more involved. Even if you have a PIN that would prevent anyone from immediately accessing your funds, a PIN is difficult but possible to brute force. This is especially true if your PIN is easy to remember or discoverable with minimal research, like your birthday or anniversary. There have also been many documented hardware wallet compromises that have allowed attackers to circumvent PINs entirely.

You should assume you’re in a race to secure your funds with a potential attacker in situations like these. You should treat this with urgency, but do not rush. Rushing increases the chances of making a critical mistake that could lead to loss of funds.

1. Restore your seed phrase to a software or hardware wallet

Quickly recover your seed phrase to a hardware or software wallet. If you have an extra hardware wallet available, you can restore your seed phrase to that device using the recovery instructions for your specific device. If you don’t have another hardware wallet, you can restore your seed phrase to a reputable software wallet like BlueWallet.

Doing this gives you the ability to spend the funds attached to your backup seed phrase, but you’re not done: someone who gained physical access to either your hardware wallet or seed phrase may also be able to spend your funds. To fix this, you need to send your funds to a new address that only you control.

2. Send your funds to yourself

Create, sign, and broadcast a new bitcoin transaction to spend the entirety of the recovered wallet’s funds to an address governed by a new seed you control, generated by a device that has not been compromised, as soon as possible.

To do this, simply purchase a new hardware wallet and set it up following the manufacturer’s instructions, or wipe an existing wallet (check very carefully that no addresses associated with that wallet hold any funds that aren’t backed up) and generate a new seed phrase.

• Trezor: Wiping the device
• Ledger: Reset to factory settings
• Coldcard: Destroy seed
• or other hardware wallet documentation

If you generated your new seed using a hardware wallet and spent your funds to an address governed by it, and you want to use this device going forward, that’s it; you’re done!

2a. Use a software wallet for expedience (if necessary)

If you cannot obtain a new hardware wallet within a reasonable amount of time or you’re otherwise concerned that an attacker may soon get access to your funds via your compromised hardware wallet, you may want to spend your funds to a software wallet as a stopgap.

After you’ve done this, acquire a new hardware wallet made by a reputable manufacturer from a reputable seller. You can then spend your funds from the stopgap software wallet you used to quickly recover access to an address generated by the seed on your new hardware wallet.

3. Continue with bitcoin security best practices

After you’ve successfully spent your funds to an address generated by your new hardware wallet, you should secure your wallet and new seed phrase as usual. You’re done!

Hardware wallet replacement FAQ

Can I replace a compromised key in bitcoin multisig?

If one of your keys as part of a fully self-custody multisig quorum (a 2-of-3 bitcoin wallet, for example) becomes compromised, there are ways to perform a key replacement using multisig wallet software like Sparrow and Electrum. We’ll cover this in more detail in future articles.

If you use bitcoin multisig by way of an Unchained vault, we make it easy to replace your compromised keys with newly-generated ones in your Unchained dashboard. You’ll generally use the same steps above, plus a few more steps in your account. Read more about this in the Knowledge Base or contact us at help@unchained.com for help.

What happens to my old wallet if I restore my seed phrase on a new one?

The answer to this is simple: nothing. As we explained in our overview of seed phrases, the seed phrase is simply a human-readable version of your seed, and your seed derives all the private keys which are used to protect your funds. When you restore a seed phrase on a second device, you’re simply gaining access to those private keys on another interface. This means restoring your seed phrase to a new device does not wipe an old one, and if your funds have been compromised, you need to move them to an address governed by a seed phrase that has not been compromised!

Can you restore a passphrase or 13th/25th word to a wallet?

If you want to restore a wallet that is protected by a passphrase (otherwise known as a 13th/25th word), that’s separate and additional to the recovery of your wallet seed phrase. First, you need to recover the seed phrase, and after that, you can access a wallet protected by a passphrase using the device itself or its associated software.

Various devices handle accessing passphrase-encrypted wallets a little differently. If you know your 12- or 24-word seed phrase and recover that onto a device, you can then go into the desktop software suite like Trezor Suite or Ledger Live to turn on passphrases and access your passphrase key. On a Coldcard, there’s an option on the main menu to activate a passphrase.

Check out Concierge Onboarding

If you want a personal walkthrough on how to replace or upgrade a hardware wallet, 1-on-1 guidance on how to secure seed phrases properly, and more, be sure to check out Concierge Onboarding. You’ll receive an onboarding call with a vault specialist, training on how to use our open-source external recovery tools, exclusive access to continuing education webinars, ongoing support, and 90 days of access to our Concierge Client service.