As you may have heard, one of the largest Bitcoin exchange markets, Bitfinex, was hacked recently.
They socialized losses among all their clients even those directly unaffected by the hack.
Because I belong to the latter group I know first hand what it feels like to lose a significant amount of money.
Had Bitfinex used Trezor as a cold storage this hack would have been less painful for everyone. Had I held my USD in BTC stored on Trezor, I would never lose money worth my annual cost of living.
Don't be like Bitfinex, don't be like me.
What is Trezor?
Trezor is a small USB-like device that holds your Bitcoins in an offline environment that is perfectly safe from hackers, thieves or even governments.
Don't just take my word for it, read more about the software design and security of Trezor.
You don't have to know anything about cryptography or Bitcoin in order to use it. With its 2 buttons ("Cancel" and "Confirm") and a simple screen, it's very idiot-proof and simple to use.
How to Use Trezor
Just plug it in your computer via USB, open wallet.trezor.io and follow on-screen instructions.
You'll go through the initial setup to secure and backup your wallet via seed ("random" 12-24 words).
After all the necessary procedures which are nicely explained in an included booklet you're ready to start using your Trezor.
First, you need to "type in" your PIN code. Just look at positions of numbers on your device and click on corresponding boxes on your computer screen.
These numbers change their position with every new sign-in attempt for security reasons.
In case you've enabled a passphrase encryption before, you will be prompted to type it in upon entering your PIN. If you skip this step you will be taken to an unencrypted wallet.
However, if you type in ANY password you will get access to a completely new encrypted wallet. This way, you can create as many separate wallets as you wish.
I highly recommend using this feature for security reasons. If your Trezor gets stolen an attacker will not be able to access the wallet without the passphrase.
Read more about what happens when your Trezor gets stolen.
Just make sure to remember the passphrase for every active wallet otherwise you won't be able to access your funds too!
After you're signed in to the device you'll be taken to the main menu which gives you a list of your accounts and transactions as well as other options.
How to Receive Bitcoin
Receiving your first Bitcoin is fairly easy. Just click "Receive" in the top navigation and either send your wallet address or the QR code to whomever you want to receive bitcoins from.
After the transaction is made you will immediately see it in the "Transactions" list labeled as "unconfirmed". It will change its status later after miners finish their proof-of-work (usually in around 10 minutes).
From that point, your bitcoins are safely stored in your wallet and only you will be able to spend them.
How to Send Bitcoin
Spending your bitcoins is as easy. Just click "Send" in the navigation and fill out the form.
You will need to copy and paste a wallet address you want to send bitcoins to and set the amount. Any other field is optional.
In the case of an ongoing attack on the Bitcoin network, you may want to choose "High" fee to make sure your transaction gets processed as quickly as possible.
Click the "Send" button and wait for the confirmation.
Make sure the amount and the address match with what's shown on your Trezor screen.
There's no need to check the whole address, generally speaking, 3-4 for characters from the beginning and the end of the string is enough.
If it matches click "Confirm" and the transaction is sent and eventually confirmed on the network.
If you hold less than tens of dollars worth of Bitcoin you may find Trezor too costly. And I agree. There's no point in storing $20 in a device worth 5x of the stored amount.
However, if you hold a substantial amount of bitcoins either as an individual or a business, securing yours and your clients' assets should be your top priority.
For just $99 (if you get the older Trezor One) Bitfinex could have prevented $70 000 000 from being stolen, and that's the fact.
Please let us know what you think in the comments section below.