When do you need to replace a bitcoin key?

Written By

Tyler Campbell & S. Porter

Four situations where you do need to replace a key

Your wallet is not secure, and you need to move bitcoin to one that is.

1. SEED PHRASE DIGITAL EXPOSURE

Storing your seed phrase on a device that isn’t purpose-built to secure keys exposes your wallet to a possible failure of digital storage media and the risk of malware like keyloggers. You should replace this key.

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2. STOLEN SEED PHRASE OR HARDWARE WALLET

If a seed phrase or hardware wallet associated with a self-custody bitcoin key is stolen or compromised, you should assume the bitcoin that key is protecting could be stolen as well.

3. DESTROYED SEED PHRASE

If you're the unfortunate victim of a flood or house fire and your seed phrase backup has been destroyed (and you don't have another copy!),  you need to replace this key. 

4. LOST SEED PHRASE OR HARDWARE WALLET

If you lose a seed phrase or hardware wallet associated with a self-custody bitcoin key, you should assume it is compromised and replace the key.

Four situations where you don't need to replace a key

You wallet is secure, but you need to replace, reset, or upgrade a device.

1. BROKEN HARDWARE WALLET

This is why you use a seed phrase backup. If your hardware wallet is physically destroyed or breaks due to various hardware or software failures, you can restore your seed phrase onto a new device.

2. FORGOTTEN PIN

If you forget the PIN to your device, you can either reset the device to factory conditions and restore your seed phrase onto it, or restore your seed phrase onto a new device. You don't need to replace the key.

3. COMPROMISED PIN

If your PIN has been compromised but nobody has gained access to the physical device, you can either reset the device to factory conditions and restore your seed onto it, or restore your seed onto a new device. You don't have to replace the key.

4. NEW HARDWARE WALLET

When you get a new device, you don't have to replace the key entirely. BIP39 seed phrases are compatible with all reputable bitcoin hardware wallets, so you can easily restore a seed phrase for a given key onto the new device.

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Bitcoin multisig with a partner like Unchained Capital prevents any of these scenarios from being a danger to your bitcoin savings. Swipe up to register for a webinar to learn more about key replacements and how to protect your bitcoin from other single points of failure.