Don't Use Ledger Hardware Wallets

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In this video, I discuss the recently launched Ledger Recover service and what it implies about security problems with the Ledger hardware wallet.

I have always recommended against using Ledger hardware wallets, especially in a single sig setup. The fact that the firmware was and remains closed-source was always a deal-breaker for me. Ledger's many customer data leaks also showed a remarkable disregard for user security and privacy.

Now we learn that the new firmware (which is still closed-source) will have the ability to export encrypted shards of the recovery seed. Here's the big problem in my opinion: if the new Ledger firmware has the ability to split the recovery seed into 3 encrypted shards and send them out from the hardware wallet-- this is not only a feature, but also a potential vulnerability that can be exploited by an attacker.

What happens when a government goes to these 3 custodians and forces them to reconstruct your private key from the 3 shards, after you have KYC'd yourself?

Stick to Bitcoin-only hardware wallets that have open source and viewable firmware, like the Blockstream Jade and ColdCard hardware wallets.

I'm not being paid or compensated in any way by any of these companies that I mention in this video.

Not investment advice! Consult a financial advisor.

Ledger data leaks:

Don't Use Trezor Coinjoin (Or Trezor):

Trezor's Betrayal (Your Questions Answered):

Ledger Launches Distributed, KYC-Based, Cloud Seed Recovery Service Then Quickly Deletes It:

Ledger Recover is "optional":

Shamir's secret sharing:

My favorite 2 hardware wallets:

I am not being paid or otherwise compensated by any company or cryptocurrency project that I mention in my videos.

My opinion is not for sale. Please do not contact me with any affiliate or advertising deals.

#Bitcoin
#ledger
#hardwarewallet

Disclaimer
Neither Bitcoin University, nor any of its directors, officers, shareholders, personnel, representatives, agents, or independent contractors (collectively, the “Operator Parties”) are licensed financial advisors, registered investment advisors, or registered broker-dealers. None of the Operator Parties are providing investment, financial, legal, or tax advice, and nothing in this video or at www.Trader.University (henceforth, “the Site”) should be construed as such by you. This video and the Site should be used as educational tools only and are not replacements for professional investment advice. There is a high risk in trading.

[Bitcoin_University]

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[Tizou]

Can’t use ledgers, can’t use Trezor, can’t use online wallets, can’t trust exchanges, have to research even deeper to keep your crypto safe. Have to worry about gov regulations and constantly watching you….I’ve been a supporter of Bitcoin for a very long time. And for the first time ever…I’m really frustrated with it all. It is so non user friendly…the jump to learn/protect yourself is far to big…and far too complex to really get retail to buy into the idea. I get it we’re early…but…at what cost? 99% of this shit is sooo over complicated :/

[Confruggy]

You know it's serious when Matt does a second video on a day

[KeystoneWallet]

Security and self custody should always be the top priority when it comes to hardware wallets

[nguyendzuy]

“Hey, I have a closed source software cold wallet business, how do I kill it?” - Ledger CEO

[sadiesometimes]

Just saw this in the mining community. Appreciate you keeping everyone aware and safe👍👍🙂

[INFINITY-oeis]

The biggest problem with this is they can extract your seed phrase from your Ledger device. This is the biggest reason why everybody is angry about this. The only way Ledger can come back from this is if they make their software open source! It's highly likely that they have already taken certain seed phrases from certain Ledger devices! It was so obvious from the start as to why their software isn't open source!

[mrpaddingtonn]

SSS is really great (same as RAID implementation for storage recovery) but is fundamentally wrong for Bitcoin. Thanks for the nudge. I didn’t know.

[nedabiah]

Hey Matt, awesome video as always! It would be good to do a follow up video showing how to migrate properly from one wallet to another, people could just get confused and enter the seeds they used on a ledger in their trezor or whatever else and think they are safe. I think the safer approach would be to create a new wallet from scratch and then transfer funds. WDTY?

[cramsa]

I feeling scammed by ledger… I am moving my funds ASAP.

[DirtyMath]

I’m already on it Matt! Thanks to you I ordered a Blockstream Jade this morning 👍

[Levilambson]

I would love to learn more about the benefits of non kyc bitcoin. If you are still subject to the same tax laws, what is the benefit of holding non kyc bitcoin? I know you talk a lot about non kyc but I would love a deep dive video about the why.

Thanks so much for your videos.. you saved me from Celsius.

[najeebhaddad]

Been watching you for over a year Matthew- you’ve been slowly creeping to 200k subscribers just about there congrats - this is the best Bitcoin channel and more people need be subscribed - spread the word!

[blakebowersphotography]

Wow, I wish I did my research before buying a Ledger Wallet.. Thank you Matthew for being so informational and keeping true to what bitcoin was made for. I have learned so much from you and converted most of my shipcoins to bitcoin and now DCA into the one and only. Since then I've experienced more peace and serenity.

[FuzzyLogic]

Here I thought I would have to wait at least a full day to get your input on this! Thanks for the update.

[theskintones]

Thanks again Matt. This video and your others on Trezor I think drive home the need for a multisig solution for everyone. Only with multisig can you be safe, no matter what hardware wallet you use. Perhaps you should do some videos on the best multisig solutions, i.e. Unchained capital etc?

[paulrprichard]

You are correct, the 3 custodians of parts of someone's seed phrase is a terrible idea.

[twenty]

Hey Matt can you do a video on Tangem cold wallet? I keep seeing their name pop up amidst this new Ledger news. I’m curious to hear your thoughts on Tangem

[chrisa]

Please talk more on this Matt, this issue hits close to home. Thanks

[Marinate]

Thanks for the rapid response. Sincerely, your viewers.