This section lays the groundwork for understanding self-custody. It's crucial to distinguish between custodial and non-custodial wallets. A hardware wallet, such as Trezor, represents the gold standard in non-custodial protection, ensuring that the private keys—the actual ownership rights—never leave the secure environment of the physical device.
The security model relies entirely on the user maintaining control of their 24-word seed phrase, which is the master backup. Losing this phrase is equivalent to losing the keys to your entire vault, whereas losing the device itself is merely an inconvenience, provided the seed is safe.
Stored securely offline. The heart of your digital identity.
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Initial setup involves connecting the device and following the on-screen prompts. The device will generate a **Recovery Seed** (24 words). This is the only time these words will be displayed. You must transcribe them carefully onto the provided **Recovery Card**.
Once the seed is recorded, you will be prompted to set up a **PIN**. The PIN protects the device from physical access by unauthorized users. Always enter the PIN directly on the host computer's interface, matching the randomized grid shown on the device screen.
Record the Seed Offline.
Set a Strong PIN (4-9 digits).
Verify Firmware Authenticity.
The user initiates a transaction on the host computer (e.g., a wallet interface). The host computer **prepares** the unsigned transaction data.
This unsigned data is transmitted via USB to the hardware wallet. The hardware wallet's secure chip processes the data and prompts the user for verification on its **trusted display**.
The user physically confirms the transaction details (amount, address, fee) on the device. **Only after physical confirmation** does the device sign the transaction using the private keys (which never leave the device).
The newly signed transaction is sent back to the host computer, which then broadcasts it to the network.
This physical verification step is what makes the hardware wallet immune to malware on the host computer.