Ledger’s guide to setting up your device is pretty basic. It’s designed for first time hardware wallet users with minimal crypto knowledge. Makes sense, but that’s not everyone. This guide is for people who want to get the most out of their device and jack up their security system. It’s packed full of every tip and trick I wish I knew when I took custody of my crypto nearly a decade ago.
If you plan on stacking serious amounts of crypto and you want to do it right the first time, this guide is for you. Here’s the steps to setting up your Ledger like a pro:
Choosing A Ledger
I’ve been using a Ledger Nano S forever and it was time to upgrade to the Nano X! I purchased my Ledger Nano X directly from the Ledger Shop on Nov. 19th 2021 and it arrived Nov. 30th! I recommend buying direct from Ledger because there’s a (very small) chance when buying from a 3rd party that the device could be tampered with, so why risk it?
The biggest problem with the Nano S was the tinyyyyyy amount of storage. It only hodls 3 apps at a time! For example, I always have BTC, ETH and Terra apps installed, but if I wanted to use Litecoin I’d have to delete one to install LTC and then delete LTC to install it back. Super annoying!
Ledger recently launched the Nano X with more storage and bluetooth! But to be honest, I’ve had lots of trouble with it. The storage is great, but bluetooth is pretty worthless since it only works with mobile and the battery causes more trouble than its worth.
Between the time I ordered the Nano X and published this guide, Ledger launched the Nano S Plus 🤦♂️ The Plus solves the storage problem, and drops the battery + bluetooth. It has a smaller screen and doesn’t have the cool swivel buttons, but I probably would have gotten that had I known.
Power Up & Using Your Ledger
The device swivels open and you plug it in to power it up. Strangely, it feels like the Nano X is designed for people who are left handed. Nothing against lefties, but, ok. It’s pretty cool how the right button is also the swivel.
For all Ledgers, press left and right buttons to navigate and both buttons to select. Hold both buttons down to visit the control center and power off.
Set Up or Restore?
Your first option is to Set up as new device or Restore from Recovery phrase. Already, I don’t think that’s very clear. What you’re actually doing is either Creating a private key or Loading a private key. Whether it’s a new device doesn’t matter. You can create or restore seeds on new and old devices.
A seed phrase (which Ledger calls a recovery phrase) is the 24 words used to generate your unique private key – the key to all your crypto. If you’ve never created a seed phrase on a dedicated hardware device now’s your chance. It’s one of the most secure ways to create a private key and it’s probably why you’re here.
If you’re like me and you already have a seed phrase created using a hardware device in the past, then you can Restore your seed phrase instead of creating a new one by punching your seed phrase into the device.
People screw this up all the time. They think since they have a new device they should create a new seed. As long as your seed phrase was properly secured and has never been typed into a computer or compromised there’s no reason to create a new seed.
If you’ve already setup your Ledger, and have a seed phrase written down but don’t have a passphrase setup yet – I have some unfortunate news for you. The only way to passphrase protect your crypto is to move your crypto. You can jump ahead to Setting A Passphrase and then send your crypto to the new wallet/addresses created in your passphrase protected wallet.
For purposes of this guide, we’re going to Setup as new device which means we’re asking the Ledger to generate a new seed phrase, which is a private key.
Creating A Pin
After selecting Setup as new device the Ledger asks you to select a 4-8 digit pin, and then enter it a second time to confirm.
Your pin works like the pin on your debit card. If someone knows the pin to your debit card AND has your card they can steal your money. If someone knows your Ledger pin AND has access to your Ledger device, they can steal your crypto.
We’re going to create two pins. The first pin, which you’re creating now during setup, is a dummy pin. So don’t make it your favorite pin which you plan on using all the time. The second pin, which we’ll create later, will be your main pin and it’s tied to your passphrase which we’ll discuss soon.
Imagine figuring this stuff out from Ledger’s “Starter Guide” 🤣 Here we do things correctly.
Generating A Seed Phrase
After creating your dummy pin your Ledger asks you to Write down your Recovery phrase. The device will present 24 words randomly selected from this list of 2048 master seed words.
Think of your seed phrase as the most important password you’ve ever created. It’s the reason you bought a device who’s sole purpose is to generate this password using the most sophisticated randomness algorithms and state of the art security ever invented. The Ledger allows you to use this magical password without ever exposing it to another computer or internet connected device.
So when the ledger says Write down your Recovery phrase it really means it. Write it down with pen and paper in a private setting on one of the Recovery Sheets provided. You may think I’m being overly paranoid but:
- Don’t do this at work
- Don’t take a picture of it
- Don’t copy/paste it anywhere
- Don’t punch it into your password manager
- Don’t try to memorize it
It’s hard for our little human brains to comprehend how these simple 24 words can be such a secure password. But if every computer on earth guessed 24 word combinations using Ledger’s randomness algorithm for a thousand years, no two computers would come up with a matching seed phrase.
A few things to keep in mind:
- The order of the words matters
- The spelling of the words matters
- The words are all lowercase
- The same word might appear multiple times
Did you write them down? Good, because now Ledger is going to make you Confirm your Recovery phrase. It’s annoying, but worth it to ensure you’ve got everything written correctly. Once confirmed, you’ll see Your device is ready. Click over, and Go to the Dashboard.
1. beef 13. priority2. science 14. song3. spell 15. welcome4. empty 16. relax5. high 17. junior6. speak 18. furnace7. melt 19. seed8. measure 20. crazy9. ancient 21. grid10. click 22. cruel11. gap 23. retreat12. veteran 24.
Setting A Passphrase
Technically, when you told your Ledger to generate a new seed phrase for you, it created a wallet with an empty passphrase. Now, we’re going to create another wallet, one with a passphrase. This is the wallet where you’ll keep everything.
From the Dashboard, hold down both buttons to access the Control Center → Settings → Security → Passphrase then tap over two times to Set up Passphrase → Attach to PIN.
Now your Ledger will ask you to Choose Passphrase PIN. Remember earlier we created a dummy pin when setting up your Ledger? Now we’re going to create the pin to your main crypto wallet. Enter the pin you plan on using to access your crypto and confirm it.
Next, Ledger will as you to Enter Passphrase. Think of a passphrase as a 25th seed word. It can be anything you want, and it will be bound to the pin you just set so don’t worry about having to type it in all the time. Passphrases allow you to have an infinite number of unique wallets all based on the same seed phrase. Remember though, passphrases are case sensitive!
After entering your passphrase and confirming it, the Ledger will ask you to Confirm with current PIN. This is confusing, but it’s asking for the dummy pin you set when you first setup the wallet.
Why All These Pins & Passphrases?
Believe it or not, we just setup a highly sophisticated security strategy to prevent against what’s known as a $5 wrench attack. If someone breaks into your house, threatens to beat you over the head with a crescent wrench until you give them your Ledger + Pin, now you have a pin you can give them – the dummy pin. You can even hodl a small amount crypto in the dummy wallet to show that funds are there.
Someday, you may want another super secure crypto wallet (or 20). When that time comes, you can simply create new passphrases vs generating new seed phrases. Your Ledger can only attach one passphrase to a pin at a time. So to access other passphrase wallets, you’ll have to use the temporary passphrase feature. If you attach another passphrase to another pin, this will replace your main passphrase/pin! No worries though, you can just attach it back again.
Gotta Adjust The Screen Saver
By default, the Ledger’s screensaver turns on after 60 seconds of not being used and forces you to punch in your pin to bring it back. This is overkill. IMO, constantly having to punch in your pin is worse security than just leaving it on while using it. Just make sure to disconnect your Ledger when you’re done.
From the Dashboard, hold down both buttons to access the Control Center then:
- Settings → Security → PIN Lock → No PIN Lock
Installing Ledger Software Updates & Apps
Now that you have your seed phrase, passphrase and pins setup on your device its time to install some apps. Ledger apps are small pieces of software that instruct your Ledger how to use your private key with each blockchain. For example, you’ll install an app for Bitcoin, Ethereum, Terra, etc.
The only way to install apps on your Ledger is through the “Manager” in Ledger Live, Ledger’s desktop software. So download Ledger Live or if you already have it, you can reset Ledger Live to follow along.
Open Ledger Live, follow the prompts, select Already have a recovery phrase (since we just set that up) Connect Device and go through the “Authenticity” check.
When you finally get to the main screen, you might see an orange bar across the top of Ledger Live telling you that a Firmware update is available. Ledgers come preinstalled with the latest firmware at the time they’re boxed, but updates may have been released since then. Go to Manager → Update firmware
Anytime you update the Ledger’s firmware, there’s a (small) risk that this could reset your Ledger or cause some issue which forces you to set it up all over again. Because of this, they make you check a box confirming you have your recovery phrase (seed phrase). Once your firmware is fully up to date, it’s time to install some apps!
You’ll obviously want to install the usual suspects: Bitcoin and Ethereum. If you’re like me you may also drop some Terra, Fantom, Monero and a few other shitcoins on there. If your have a Ledger Nano S, it can only hodl ~3 apps at a time! Which is super annoying.
For now, we’re only going to install the Bitcoin app. So click Install alongside Bitcoin.
Adding & Funding Crypto Accounts
Now that you have the Bitcoin app installed it’s time to add your first Bitcoin account. Proceed to the Portfolio screen and click Add account. Select Bitcoin as the asset, open the Bitcoin app, choose an account and confirm.
Bitcoin has lots of different account types these days… That’s a topic for another day, but the important thing to know is that if you’re recovering an old wallet, the account type you’re looking for probably won’t be the Native Segwit account Ledger defaults to and that not every exchange/wallet you interact with in the future will support Native Segwit yet even though its more efficient and will result in lower transaction fees. So we’re going to select only the Segwit account and click Add account.
Now we’re going to add a small amount of BTC to the account. So visit the Accounts page, click the Bitcoin 1 account you just created and click Receive to get your bitcoin address.
Ledger Live will ask you to confirm the address displayed on the screen matches the address shown on your Ledger device. It’s important to understand why this is happening!
Remember, we bought this device because we wanted a dedicated computer for managing our private key, this private key is what generates our public keys (also known as addresses). Technically since your computer is connected to the internet and has all sorts of random software installed on it, nothing displayed on your computer should be trusted when it comes to crypto. But if the address displayed on your Ledger screen matches the address on your computer screen, you know the address is accurate.
My address was: 3JPPf9z3bg99t7bXDAcdjAdDwyUPWap9Tf
Now that you have the address, send a small amount of bitcoin to it. For most of you, that means withdrawing to your address from an exchange like Coinbase. If everything goes according to plan, within a minute or two, your Ledger Live app should automatically update to show your new balance. You should also get in the habit of checking your transactions on a block explorer.
Destroy & Restore
Now is the chapter of this guide which separates the whales from the minnows. We spent all that time setting everything up, and now we’re going to reset it ALL to factory settings and recover from our seed.
“WHO HAS TIME FOR THIS SH!T?????“
I get it… And I agree with you. It’s painful. But this is the most important step of the whole process. After this, you’ll have a deep understanding of how all the pieces fit together. We’re working on building your conviction, experience and confidence in this technology and your ability to use it properly.
I always say, “the stronger your foundation, the more you can build on top of it“. And we want to build a fucking empire on this thing. Are you ready?
On your Ledger: Settings → Security → Reset Device
In Ledger Live: Settings → Help → Reset
Now that your Ledger is all fresh and clean, you’re going to Restore from Recovery phrase this time instead of setting it up as a new device.
Use your dummy pin again, punch in your seed phrase, then setup your passphrase and attach it to your main pin.
Fire up Ledger Live and Connect Device, install the Bitcoin app and Add your account.
If you do it all correctly, your bitcoin will appear in your wallet. If not, you won’t be able to find your bitcoin. That’s why we only sent a small test amount 😉
If you can’t find your bitcoin yet, don’t freak out. Just go through the steps again. This is the entire point of this process. Learning, understanding, tinkering, figuring it out, getting comfortable with it.
In fact, you now have have all the skills necessary to steal the 0.003 BTC I sent to this wallet. You’re just missing a little bit of information… like the month Satoshi first published the Bitcoin White Paper and the first name of the guy Newsweek thought was Satoshi.
✅ The BTC was swept within 48 hours ~ congrats to whoever got it.
You’re all setup, but you’ve still got a lot to learn. A few things to learn next: