Rule #1: DO NOT TRUST THE COMPUTER SCREEN.
The very reason for using a hardware wallet is that your computer IS
compromised, trusting it makes using the hardware wallet an expensive
security theatre (or 2FA at best). Always verify on the HWW device
Rule #2: Verify your “receive” addresses BEFORE accepting funds.
A compromised computer can be tricked into displaying addresses that
belong to an attacker. The only way to make sure you own the addresses
is to display them on the HWW device and verify they match.
Rule #3: Verifying change address should be done by the device when sending funds, not before like receive addresses!
It is pointless at best, and misleading at worst, to verify them
beforehand like receive addresses. All hardware wallets support
verifying the change address belongs to you AT TIME OF SIGNING A
TRANSACTION. Verifying before that is pointless and error-prone.
Now let’s talk some multisig…
Rule #4: Verify the xpub of each hardware wallet used in a multisig quorum on the device it belongs to.
This is not 100% mandatory – but if you’re no expert – you really
should do it. If a hardware wallet doesn’t support displaying the
xpub, (like Trezor), it could be fine to just verify each address on
it – so long as you verify consistency on all other devices as well,
but I wouldn’t recommend such a device for non-experts.
Rule #5: Verify “receive” addresses on EVERY device of the multisig quorum.
This is especially true for at least one address (see next rule) but
recommended for all. If using a device that you haven’t verified the
xpub of on-screen, you should verify all receive addresses on it!
Rule #6: While it is best to verify each receive addresses on ALL devices in the multisig setup – you might choose to trust a specific
one, verifying the xpub/ first address on all – then the rely only on
the “trusted” device – ONLY IF YOU ALSO VERIFY XPUBS…
By that, I mean verify on the “trusted” hww used for general
verification, that the xpubs are consistent for all cosigners. This is
needed only once with wallets like ColdCard, Cobo Vault, Bitbox02, and
Specter DIY – since they allow saving the multisig xpubs on the
With Trezor T – you have to verify the xpubs of cosigners every time –
which is why it’s not recommended for that purpose – with Trezor One
it’s simply not possible…
So while you might use a Trezor in a multisig, I would not recommend
it to non-experts.
Rule #7: Do NOT use Ledger in a multisig setup! (unless you are an expert or have a very good reason…)
Ledger currently does not allow verifying multisig addresses on the
device – nor displaying the XPUB on its screen.
This means you have no way to verify it was not swapped by an attacker
in your multisig setup – EVEN IF YOU DO A SUCCESSFUL TEST TRANSACTION!
It is still possible for a (very) sophisticated attacker to make you
think it worked, while it was him signing for you…
Rule #8: For convenience, you may print out/ write down a large batch of your receiving addresses – verify all at the same time, and
rely on that paper list for your day to day verification. This is very
useful for multisig! – where devices might be distributed in various
Rule #9: Multisig change verification should be the same as with Rule #3 – on the device at the time of signing.
Popular devices (besides Ledger as said), can verify that the address
you send from and the change address used belong to the same multisig
wallet (from same xpubs).
If they fail to verify the change address – they will show it as a
standard, independent, recipient – in that case YOU SHOULD NOT MAKE
THE TRANSACTION. This is valid for both single sig and multisig!
(although even more relevant for the latter).
Rule #10: Hardware wallets cannot verify your balances – and that’s great!
Verifying balances requires getting information from the Bitcoin
network – i.e. you need to be online – which would make hww more
vulnerable… This is where a full node comes in!
It is strongly recommended that you run your own Bitcoin full node –
and use it as your main source for verifying your balances and
transaction history! For redundancy, you could double-check against
block explorers or another node (use a different device for either!).
One last thing: These rules apply to any device you use as a
segregated signing device – be it a “traditional” hardware wallet, an
airgapped laptop, a mobile phone etc.
If you want to separate your keys without having a security theatre,
you should verify on your signing device!
Please note: Some things here might not be fully accurate for the
expert user (especially around multisig address verification), but for
the less advanced users’ sake, I have tried to be on the safe side
when things get tricky…
Also check out some more info on multisig setups over at
https://btcguide.github.io (Michael Flaxman guide)