How to Ensure Your Privacy When Buying Bitcoin Hardware
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Disclaimer: This guide is intended solely for Bitcoiners who wish to pursue an exceptionally high level of privacy. For the average Bitcoiner, there is no need to follow these steps, as the products we recommend at The Bitcoin Way are already designed with robust privacy protections and handle your data responsibly. This advice is for those with serious or heightened privacy concerns only.
Read on and learn what steps you can take to enhance your privacy when acquiring Bitcoin hardware, while also exploring some of the high-grade hardware available.
Why Does Privacy Matter When Buying Bitcoin Hardware?
Privacy matters a lot when it comes to using bitcoin.
For example, it’s important to limit who knows about your BTC holdings and use so that you prevent certain types of attacks, including the $5 Wrench Attack. Therefore, your use of Bitcoin hardware should be as private as possible.
Having your purchase of hardware linked to your name, email address, or home address in a database maintained by the vendors can expose you to risks of being attacked online or in the physical world.
Incidents like the Ledger data breach have shown that Bitcoin hardware manufacturers and vendors are being targeted, and the information they collect can get into the wrong hands, putting you at risk.
What Happened in the Ledger Data Breach?
In July 2020, the hardware wallet company Ledger experienced a data breach that leaked over a million email addresses, as well as hundreds of thousands of postal addresses and phone numbers from its e-commerce platform.
While customers’ funds were unaffected by the breach itself, many were concerned about their key personal information being available on hacker forums and the potential risks that they were now exposed to.
This data breach acted as a reminder to give more thought to the question of what data gets collected when we purchase Bitcoin hardware and how that data can be used against us.
To avoid becoming victims of such data breaches, it’s advisable to acquire your Bitcoin hardware through processes that are more privacy-focused.
How to Maintain Privacy When Acquiring Your Bitcoin Hardware
There are several steps you can take to preserve your Bitcoin privacy so that you don't leave digital footprints leading to you when purchasing Bitcoin hardware. The most notable of these are the following:
Pay With Bitcoin
Instead of using fiat payment methods that are tied to your name and other personal information, pay with BTC. When used correctly, bitcoin can protect your privacy no matter whether you’re sending BTC or receiving it, especially when you’re not reusing your Bitcoin wallet address.
Use a Private Email
Where it is necessary to provide an email address, use one that can't be linked to your identifiable public profile. You can choose to create one specifically for making the purchase.
Recommendation: Create a dedicated email address using ProtonMail or Tutanota, both trusted by Bitcoiners for their end-to-end encryption and no-KYC signup options. ProtonMail’s Proton Alias feature allows you to generate temporary, anonymous email addresses for one-time purchases, ensuring your primary email remains unlinked. For example, use a Proton Alias like temp123@pm.me when ordering your hardware to keep your identity private.
Get a Burner Phone Number
Burner phones and numbers can be purchased without disclosing your personal information. This offers you a great way to stay anonymous and therefore preserve your security when purchasing Bitcoin hardware.
Use Bitcoin-accepting services like SMS4Sats , tusted by Bitcoiners for generating temporary, no-KYC virtual phone numbers. SMS4Sats provides disposable numbers for SMS verification.
Ship to a Rented Box
Instead of using your home address, your workplace, or any other address that can easily be linked to you, consider shipping your Bitcoin hardware to a rented box instead. This way, your direct physical address isn’t stored anywhere where malicious actors could find it.
Use Secure Online Connections
When connecting to the internet to order your hardware, make sure you’re not using public networks where others can easily see your activity. Additionally, don’t click on suspicious links, and don’t tell anyone more than you need to about your purchases.
4 Bitcoin Devices to Check Out
As you now know how you can buy Bitcoin hardware securely, we’ve listed several device options that will help improve your privacy when actually using BTC.
Coldcard
The Coldcard is a cold storage bitcoin wallet, known for its air-gapped option. The wallet is fully open-source, except for the core hardware schematics, meaning that it’s possible to inspect and verify the software running on the device.
Coldcard’s Key Features
- Air-gap operation: If you use this option, your private keys are never exposed online as transactions are signed through a USB port or a microSD card. However, you can still connect this wallet to your computer via USB.
- Optional trick PIN features: The hardware offers extra PIN features, including the ability to intentionally destroy your wallet when you’re forced to give up your login information.
- Pay with BTC: You can pay for the wallet using BTC to enhance privacy.
- Multisig feature: The wallet can be set so that up to 15 cosigners need to approve transactions.
Passport Core
The Passport Core wallet is a product of Foundation. Its hardware and software are also open-source, allowing for community audits.
Passport Core Key Features
- Air-gap operation: It also has an option to sign transactions offline using the built-in QR code scanner and a MicroSD card.
- BTC purchase: You can pay for the hardware wallet using BTC.
- Multisig support: The wallet can be configured so that a transaction can be approved using multiple private keys.
SeedSigner
SeedSigner is not a hardware wallet but a bitcoin seed phrase generating and transaction signing device that you can assemble yourself from provided components or buy a pre-assembled version.
However, by buying components, such as a Raspberry Pi Zero, an LCD screen, a scanner, a microSD card, and 3D printing a case yourself, instead of purchasing finished hardware, you reduce the likelihood of anyone knowing you have a cold storage wallet.
SeedSigner Key Features
- Air gap operation: Offline signing of transactions is achieved through the use of QR code scanning features.
- Fully customizable: You’ll buy all the components separately, then use their online tools and guides to set everything up with a personal touch.
- Most vendors accept BTC: For the pre-made kits, you can pay using BTC, which helps to safeguard your privacy.
- Useful for multisig setups: SeedSigner helps with using a Bitcoin multi-signature wallet by reducing its costs and complexity.
Start9 Node
Start9 Node is another kind of Bitcoin hardware, as it’s a whole personal server you can use to mainly run your own Bitcoin node, which also helps to improve your privacy.
Start9 Node Key Features
- Bitcoin and Lightning nodes: It can run a full Bitcoin Core node and a Lightning Network node.
- Multiple apps in one place: You can also get Electrum Server, Mempool Explorer, Nostr relays, and more.
- Tor networking: Every service is accessible over the Tor network, enabling remote access without exposing your IP.
Learn More About Bitcoin Hardware Privacy With The Bitcoin Way
As Bitcoin hardware privacy and Bitcoin privacy in general are important and more complex topics, we, at The Bitcoin Way, are happy to help you with all the related questions you might have.
We offer consultancy services to Bitcoiners who want to adopt the best practices for interacting with Bitcoin safely, while taking advantage of all the benefits this technology has to offer.
Take control of your Bitcoin privacy—book a free 30-minute consultation with our experts today!
FAQs
Are Bitcoin hardware wallets safe?
Bitcoin hardware wallets are generally safe for storing your BTC. However, you need to go the extra mile to make them a lot safer for you, such as not sharing personal data with vendors, especially because they can be hacked, and you don't need anyone knowing you have invested in a high-grade hardware wallet. Moreover, air-gapped wallets are generally safer.
Are hardware wallets traceable?
Bitcoin hardware wallets aren’t necessarily traceable by themselves. In the majority of cases, they’re designed in ways that protect users’ data. However, companies manufacturing and selling them may use unsafe data storage practices, so you should be careful what data you share with them.
Do I need BTC hardware?
Yes. If you want to fully protect your bitcoin, you will need to use a cold wallet to store your private keys offline. This is especially the case if you happen to be holding a significant amount of bitcoin. Also, you can consider acquiring other types of Bitcoin hardware, such as nodes or even mining hardware, to try your luck in solo mining.