Cold wallet question

[krusepig]

How do people get in trouble with self cold storage?
Lose hardware wallet device - your safe as long as you have seed right?
Hardware device breaks- ditto
Forget PIN- ditto
Lose seed words- you can still transfer your coins to a different wallet with new seed words right?

[titular]

People get in trouble with cold storage when they are not educated properly on how to use it.

I would say improperly backing up the seed causes the most issues for people new to using ANY wallet, not just cold storage wallets.

To answer your other questions, if the device breaks or you forget your PIN, you are certainly able to reset the device and reaccess your wallets assuming you backed up your seed correctly.

If you lose your seed phrase, but still have access to the wallet, you can absolutely just transfer the assets to another wallet from a new seed phrase.

[deadmousehat]

Lost or damaged hardware wallet device just buy a new one.
Forget PIN there is no big deal.
Lost seed words,  if we realize we lost immediately move the assets in it to a new wallet with a new seed phrase.
The key is in the seed phrase. to be honest I've forgotten my nano ledger pin many times. but it's not a big problem as long as I store the seed phrases correctly and safely.

[mk4]

How do people get in trouble with self cold storage?

Unfortunately, some people hand over their wallet's seed phrase like it's candy, then they get surprised that their wallets got hacked.

That, and sometimes them not double-checking their seed phrase when writing them down. Mistakes in ordering and such.

[magnum1010]

Actually, yes. You are safe until you remember your seed phrase. Even if you lose your cold wallet, you can recover your tokens. The main thing is to remember a seed phrase. Then you can just buy a new cold wallet and connect it to the same account with this seed phrase. The most important thing is not to share your seed phrase and store is somewhere on paper.

[Poker Player]

How do people get in trouble with self cold storage?
Lose hardware wallet device - your safe as long as you have seed right?
Hardware device breaks- ditto
Forget PIN- ditto
Lose seed words- you can still transfer your coins to a different wallet with new seed words right?

I would say that it is more important to keep the seeds well than the HW. Everything you mention, losing the HW, having it break, etc. It is solved if you have the seeds. Therefore, what you have to have well saved are the seeds, which are the keys that give access to your money, the HW is a device that you can use if you have the seeds.

[pooya87]

Lose seed words- you can still transfer your coins to a different wallet with new seed words right?

If you have access to the wallet software/file (like Electrum installed on an airgap PC, or the hardware wallet itself) then in almost all cases you should be able to get the seed phrase again from the software. But if you don't have the wallet or the encryption password, etc. then it is not possible to access the coins.

[witcher_sense]

Lose seed words- you can still transfer your coins to a different wallet with new seed words right?

It depends on what you mean by "losing your seed." The very concept of cold storage implies that you rarely touch these keys, which means if you "lose" them or someone stole them, you're not going to notice it quickly enough to be able to recover your funds or send them to another wallet. Moreover, as others have already mentioned, most people lose access to their cold storage due to phishing attacks. Once you hand over your seed to a scammer, you can say goodbye to your coins. So, in order to not lose your seed, not only your storage should be cold but also your head. Think before making stupid decisions.

[NeuroticFish]

Lose hardware wallet device - your safe as long as you have seed right?
Hardware device breaks- ditto
Forget PIN- ditto

You can recover with the seed phrase, this should not be a problem usually.
Some users use various wallet software, each behaving different and they may end up, for example, with the coins at a derivation path unexpected by the next software (legacy vs SegWit, use of sub-accounts..), but with a bit of help, this can be recovered easily.

Lose seed words- you can still transfer your coins to a different wallet with new seed words right?

In theory yes, in reality, most notice they've lost their seed when they already lost access to the wallet and want to recover. And then it's too late.

How do people get in trouble with self cold storage?

Your questions are about hardware wallets actually, hence that's what I'll answer about:
* One case is, as said, lost seed and lost access to the wallet.
* Another case is saving the seed "safely" somewhere online (hint: that's the opposite of keeping safe), like email or cloud.
* Some do tests and end up receiving coins in a wallet actually not related to the addresses generated by the hardware wallet.
* Some use fake wallet and that could maybe replace recipient address (but one has to be careless when signing the tx with the hardware wallet)
* Some have the computer infected and for example the malware watches the system clipboard and replaces the recipient address with the hacker's address, hence the user sends transactions to the hacker's address instead of wherever it was intended to (but again one has to be careless when signing the tx with the hardware wallet); of course, this same can happen when withdrawing from exchange to own wallet and then the exchange will send the funds to wrong address and there's no double check on hardware wallet screen.

[Pmalek]

If you lose your seed phrase, but still have access to the wallet, you can absolutely just transfer the assets to another wallet from a new seed phrase.

Assuming you still know your PIN code. You will need the PIN to unlock the wallet and move the coins to a different wallet whose seed is properly backed up.

Actually, yes. You are safe until you remember your seed phrase. Even if you lose your cold wallet, you can recover your tokens. The main thing is to remember a seed phrase.

Actually, you should never try to remember your seed and rely on your memory. The seed is supposed to be written down on paper or engraved in steel. You make several copies and store them in safe places.

[TheUltraElite]

Lose seed words- you can still transfer your coins to a different wallet with new seed words right?

What do you mean by "lose" seed words? Lose the place where it was written? If you lose that, you lose access to your wallet, but technically if you devices are not such that you need to restore it right now and you could still open the wallet and send to a new one, then yes you can create a new wallet, a new seed phrase and quickly send the coins to that one and abandon the one which you forgot the seed phrase to.

The most common theft is also the stupid one - some users end up saving their seedphrase on text files in a cloud storage - these are prone to get hacked. Better to keep it secure and take some of your own measures to confuse the reader in case it ends up in wrong hands. This you have to think on your own.

[mk4]

Actually, yes. You are safe until you remember your seed phrase. Even if you lose your cold wallet, you can recover your tokens. The main thing is to remember a seed phrase. Then you can just buy a new cold wallet and connect it to the same account with this seed phrase. The most important thing is not to share your seed phrase and store is somewhere on paper.

Quick reminder that it's heavily inadvisable that you memorize your seed phrase. So much things could happen that could end you up losing the seed phrase on your head; from unexpected brain aneurysms, various kinds of accidents, or you know — just you forgetting them.

[dkbit98]

How do people get in trouble with self cold storage?

Most trouble is created when people want to act smart and create their own system with replacing words or if they split seed words with their own system, or if they really to much on their memory.
If they talk and brag a lot how they own Bitcoin can get them in big trouble also.

Lose hardware wallet device - your safe as long as you have seed right?

It all depends what hardware wallet you lose, some of them can be hacked with proper tools and skills (Terzor, Keepkey...) and seed words ca be extracted.
Losing hardware wallet with secure element will be harder for them to hack, but impossible especially if wallet is closed source with potentially hidden backdoors.
Person that lose hardware wallet should just in case import seed words in different cold wallet and move all funds to new address

Lose seed words- you can still transfer your coins to a different wallet with new seed words right?

Losing a seed words is much worse than losing a hardware wallet, and I would strongly suggest importing them to new wallet and sending to other address that you control asap.
Using 25th words or passphrase would also be a good idea, but keep it separate from seed words.

[joniboini]

Other than lack of knowledge, a prideful mindset/arrogance is probably one of the contributing factor. Downplaying the risk that they can get screwed because of their habit, etc. Believe it or not, even some of the most experienced users that I know of still make silly mistake here and there. Even making sure that you still has access to your seed might not be as simple as you might think it is.

[SFR10]

Lose seed words- you can still transfer your coins to a different wallet with new seed words right?

Since you mentioned in the other thread that you've already ordered the buggiest hardware wallet ^{[AKA Ledger Nano X]} at the moment, then there's always a possibility that when you try to transfer your coins to a different address, you might encounter a bug and that might lead to your device resetting itself automatically ^{[in other words, you'd be losing everything]}:

• Did your device reset automatically?
  If your device displays Welcome to Ledger Nano X, it has been reset. Your device can reset to factory settings automatically after updating the device firmware or encountering a bug.
  
  Don't worry, your crypto assets are safe as long as you have your 24-word recovery phrase. Please follow the instructions to restore your private keys from your recovery phrase.

How do people get in trouble with self cold storage?

In addition to the above comments, you can find a few more from the following thread: Attack vectors for Hardware Wallets

[Pmalek]

Since you mentioned in the other thread that you've already ordered the buggiest hardware wallet ^{[AKA Ledger Nano X]} at the moment, then there's always a possibility that when you try to transfer your coins to a different address, you might encounter a bug and that might lead to your device resetting itself automatically ^{[in other words, you'd be losing everything]}:

Ordering a new Nano X might not have been the smartest move in this in this day and age. I hope OP wont get one with battery issues. Either way, @krusepig please keep us posted if the device that gets shipped to you is working as promised.

Even if the device resets itself, you aren't losing your coins. I didn't understand that part of your post. If a transactions is initiated and signed, it will go to the mempool and either be included in a block and moved to the new destination address, or it goes back to the original address it was sent from after getting dropped from the mempool. How would you lose the coins if you can recover the original wallet?

[SFR10]

Even if the device resets itself, you aren't losing your coins. I didn't understand that part of your post. If a transactions is initiated and signed, it will go to the mempool and either be included in a block and moved to the new destination address, or it goes back to the original address it was sent from after getting dropped from the mempool. How would you lose the coins if you can recover the original wallet?

I should've been clearer ^[sorry]... I meant to say "while" trying to transfer it ^{[in other words, it never gets broadcasted]}, and my answer was for a specific situation that @krusepig was referring to ^{[without the recovery phrases]}.