“Cold wallet for crypto assets”
Image extraction: DALL・E2

In the early part of 2017, social media posts and blogs with titles like “I tried buying Bitcoin” and “Let’s buy coffee with Bitcoin” started to appear here and there. The price was around 1000 USD for 1 BTC.

Within 3-4 years, I could not possibly have imagined that it would appreciate to the point of reaching (albeit briefly) 68,000 USD. Therefore, I was buying a little in fear and then selling it immediately. The biggest reason I was scared was due to its price movements. It was moving as if a 4-hour candlestick was a 15-minute candlestick in forex trading.

Furthermore, I didn’t have much surplus money at the time. I still don’t have much now, but I had even less back then, so I wasn’t in a position to be buying something incomprehensible like cryptocurrency (as it was called at the time). However, since I had already started doing a bit of FX trading, I was speculating in the same way as I did with forex.

At that time, there were also people who believed in the potential of crypto and were making bold investments. I think many of these people became millionaires, but I didn’t have such boldness.

The Future of Crypto

As for what I currently think about the future potential of crypto, I think Bitcoin will continue to be used (traded), and I also think Ethereum will become commonplace for online use. …From an investment perspective, I wish I had reached this view six years ago, but I don’t think BTC will stop at its current price (around 30,000 USD), so I’m holding on to the BTC I already have, and I’m also making regular savings (though the amount is small in either case).

By the way, I use a Trezor hardware wallet for holding. It’s what’s called a cold wallet. I think there are people who remember the NEM theft incident at Coincheck in January 2018. At that time, I also held NEM at Coincheck. The stolen NEM was replaced by Coincheck and converted back into yen (although I was not satisfied with the conversion rate), so I don’t feel like I was a victim of the incident (in fact, I think it’s fair to say that the real victim was Coincheck, not the customers), but I did feel the fear of being robbed.

I almost lost access to my Trezor wallet.

Since then, I have generally stopped holding in exchanges or hot wallets. But even cold wallets aren’t perfect. The probability of theft is probably much lower compared to other methods, but the scariest thing when using it is losing access information like the private key.

Physical storage of important information depends on personal characteristics, and while some people might find it easy, others might find it difficult. I didn’t think it was that hard. I thought it would be fine to keep it where I store my passport, residence permit, bank cards, etc.

Furthermore, when you buy a Trezor hardware wallet, several cards come with it for you to write down your private key. This private key is also known as a recovery phrase or backup phrase, and when you create a wallet, several cards are included for you to write down multiple words (24 words) that become the private key of that wallet. And Trezor also has a feature to test whether these are correct.

I’ve seen quite a lot of blogs and videos saying, “As long as you don’t lose this recovery phrase, you can restore your wallet.” This is generally correct but not entirely.

The Wallet’s Name
The passphrase (the 25th word you decide)

also need to be remembered. It’s strange that this isn’t pointed out more often.

I started using Trezor in 2018 and I use it very rarely. When I learned that the Trezor smartphone app was now usable, I tried to access it last month (May 2023) after a long time, and the firmware specifications were quite different from the last time I accessed it (I think it was about a year ago). In the past, the storage method for Ethereum was different from Bitcoin and others, but now they have been integrated.

When I tried to access it, no matter how many times I tried, it only showed that my wallet was empty (I started to break into a cold sweat). So, I tried to restore my wallet. After all, I thought “I can restore my wallet as long as I don’t lose the recovery phrase.”

When I tried to restore it, I was asked for the “wallet’s name” and “passphrase”. You need to remember whether you set a passphrase or not (this is the point when cold sweat really starts to pour).

I remembered that I hadn’t set a passphrase, albeit faintly, and nothing was written on the card, so I chose not to set it. As for the wallet’s name, I had no memory or record at all, so I ended up having to rely on the primitive and reckless method of guessing and trying randomly (at this point, my mouth was dry and I was in tears).

While waiting for a response from Trezor’s customer support, to whom I had contacted, I was repeating that primitive and reckless work, when I happened to notice that the password for the hardware wallet itself was written on the private key card.

I thought it was unlikely, but when I entered that password, happily, a wallet with the correct balance was displayed (more of a state of collapse than happiness).

The world is said to be moving towards a “Web3” phase, where “you have to protect yourself,” and I think crypto is a technology that will be used in such a Web3 world. It was an event that made me realize that I have to thoroughly acquire the skills and habits to manage a wallet in such a world.