What happens if your hardware wallet breaks, gets lost, or is stolen
A broken or missing device can be replaced, because your seed phrase rebuilds the whole wallet.
Your bitcoin is not stored on the hardware wallet, so a broken or lost device does not lose coins as long as you have your seed phrase. Buy a new device, restore it from the words, and check that your balance appears. If the device was stolen or your seed phrase may have been seen, set up a new wallet with a new seed phrase and move everything to it right away.
Disclosure: I work at Blockstream, the company that makes the Jade wallets mentioned here. I joined after many years as a satisfied user. There are no affiliate links on this site.
Why a dead device does not lose your bitcoin
Blockstream's Jade Plus FAQ says your bitcoin lives on the Bitcoin network, not on the device. The device holds the keys that can spend it, and your seed phrase can recalculate every one of them.
Jade, BitBox02, SeedSigner, and many other hardware wallets use the BIP39 standard for the seed phrase, so the words you wrote down restore on a new unit of the same model or on a different wallet entirely. For how that works, read what is a seed phrase.
Before anything goes wrong, make sure your backup includes everything a restore needs: the 12 or 24 words in order, your passphrase if you use one, and for multisig, the wallet configuration file. The backup guide covers where to keep it.
If your hardware wallet breaks
- 1Leave the broken device alone for now. Your bitcoin is safe where it is.
- 2Buy a replacement directly from a maker. It does not have to be the same brand. My wallet rankings cover the Bitcoin-only options.
- 3On the new device, choose restore or recover instead of create. On Jade, that is Set up Jade, then Restore Wallet, then enter the 12 or 24 words on the device itself.
- 4Enter your passphrase if you used one. A wrong or missing passphrase opens a different, empty wallet without any error.
- 5Connect the device to your wallet app and check that your balance and past transactions appear.
- 6Once the restore works, wipe the broken device if it powers on at all, or destroy its storage before you throw it out.
If your hardware wallet is lost
A finder needs your PIN to use the device, and good hardware wallets limit guesses. How much protection you have depends on the model:
| Wallet | What a finder faces |
|---|---|
| Jade and Jade Plus | The seed is encrypted and needs your PIN plus a blind oracle (Blockstream's, unless you run your own) to decrypt. Three wrong PINs and both the device and the oracle delete their secret. |
| BitBox02 | After the 10th wrong device password, it resets to factory settings. |
| SeedSigner | Nothing to find. It keeps the seed in memory only while powered, and the memory is wiped when power is removed. |
Restore your seed phrase onto a replacement device using the steps above, so you can spend again.
Then make a judgment call. If you lost the device somewhere ordinary and your PIN was not written on it or near it, the risk is low. If you have any doubt, set up the new device with a fresh seed phrase and move your bitcoin to it, which costs one transaction fee.
If it was stolen, or your seed phrase was seen
Treat this one as urgent. A thief who targeted you may have watched you enter the PIN or found your written words in the same drawer. Anyone with the seed phrase can spend from any device in the world, and whoever moves the coins first keeps them.
- 1Get a new hardware wallet, or use a spare. Do not restore the old seed phrase onto it.
- 2Create a brand-new wallet with a new seed phrase, and write it down.
- 3Restore the old seed phrase onto a spare hardware wallet just long enough to spend from it, or use the old device if you still have it.
- 4Send all of your bitcoin to an address from the new wallet, checked on the new device's screen. Pay a fee high enough to confirm quickly.
- 5Once it confirms, destroy the old written backup and stop using the old seed for anything.
If your passphrase was not with the stolen items, the seed alone opens an empty wallet, which buys you time. You still need to move the coins.
If the restored wallet shows a zero balance
The seed is almost always fine, and the wallet is looking in the wrong place. Work down this list in order:
- Every passphrase, including a typo, opens a valid but different wallet, so confirm yours first. Jade shows an 8-character wallet ID on its home screen. If you noted it before, compare it.
- Pick the address type your old wallet used. Native SegWit addresses (bc1q) use derivation path m/84'/0'/0', Taproot (bc1p) uses m/86', wrapped SegWit (starting with 3) uses m/49', and legacy (starting with 1) uses m/44'.
- If you used more than one account in your old wallet, the coins may be in account 1 or 2, not account 0.
- BIP44 wallets stop scanning after 20 unused addresses in a row (the gap limit). If you generated many addresses without using them, raise the gap limit in Sparrow under the wallet's Advanced settings.
If you lost the seed phrase, or both
If you lost the seed phrase but still have a working device, you can still spend, so act now. Set up a new wallet with a new seed phrase, back it up properly, and send everything to it, because a wallet with no backup is one accident from a total loss.
If you lost both the device and the seed phrase in a single-signature wallet, the bitcoin is gone. No company, including the maker, can recover it. Assume anyone who contacts you offering to "recover" a lost seed is a scammer.
Multisig is the exception, and the reason to use it for larger amounts. In a 2-of-3 setup, losing one device or one seed costs nothing, as long as you still have two seeds and the wallet configuration (the output descriptor). Sparrow prompts you to back up that descriptor when you create a multisig wallet. A multisig address is built from every cosigner's public key, so if one seed is gone, the descriptor is the only place its public key survives, and two seeds without it may not be enough.
Frequently asked questions
What happens if my hardware wallet breaks?
Nothing happens to your bitcoin. Buy a new hardware wallet, choose restore, enter your seed phrase and passphrase if you have one, and your balance comes back.
How do I recover my Bitcoin wallet with a seed phrase?
Use the restore option on a hardware wallet, enter the words in order, add your passphrase if you used one, and connect it to your wallet app. If the balance shows zero, check the address type and passphrase before anything else.
Do I need the same brand of hardware wallet to recover?
No. Any wallet that supports BIP39 seed phrases can restore single-signature wallets. Match the address type, and for multisig, import the wallet configuration file as well as the seeds.
Can someone steal my bitcoin from a lost hardware wallet?
Not without your PIN on a well-designed device. Jade wipes its secret after three wrong PINs, and BitBox02 resets after ten wrong passwords. Anyone who has your seed phrase can, which is why a stolen backup means moving your coins immediately.
What if the hardware wallet company goes out of business?
Your seed phrase still works. BIP39 is an open standard, so the words restore in other hardware wallets and in software such as Sparrow. Keep a note of your address type with your instructions, and store any passphrase separately from the seed.
Should I type my seed phrase into a computer to recover faster?
No. Restore onto a hardware wallet. A seed phrase typed into an internet-connected computer has to be treated as exposed, and the safe fix is to move your bitcoin to a new seed.