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Summary

Cold storage is probably the most fail-safe method of protecting bitcoins. All the intricacies and dangers of online security disappear, replaced by the much simpler, non-technical, task of physically securing a piece of paper, usb cord, or hard drive. However, most bitcoin cold storage systems are not very user friendly and technically sophisticated, and have thus not resonated with the mainstream of bitcoin users. Trezor has succeeded in providing client-side cold storage to the masses, and has thus been named as one of the most important bitcoin security innovations of the last year.

Trezor was developed by Satoshi Labs, the team behind popular mining pool Slush (a.k.a. mining.bitcoin.cz) and coinmap, an application showing users the closest bitcoin accepting merchants and bitcoin ATMs. Satoshi Labs consists of approximately 10 developers, and is located in Prague.

The Trezor Product

Trezor is a rectangular-shaped plastic device, about 60% the size of a credit card. It has a usb input at its base, and the main area has a very clear OLED screen and two buttons. Trezor is designed to be portable and is sturdy enough to survive daily within a pocket or attached to a keychain.

How it works

After connecting the device, the user will be instructed to go to mytrezor, where they will be prompted to download and install the trevor browser plugin, necessary for trezor to communicate with the online environment. Once downloaded, the user will be prompted to enter a pin. Trezor has a unique method of protection against keyloggers. The numbers on the pin are displayed in the browser, meaning that numbers must be clicked rather than typed. However, the keypad is populated with question marks, and a random display of numbers, in displayed on the trezor OLED screen. Thus, while the pin entered will remain the same, the order of the numbers will change according to what is displayed on the OLED screen, preventing against screen share hackers gaining the pin.

Users then are provided a mnemonic 24 word passphrase, one word at a time, on their trezor screen. Trezor passphrase is the wallet seed, from which all subsequent addresses can be recovered. This is the only backup users will need, and if trezor is lost or stolen, the passphrase can be used to recover their wallet on other hierarchical deterministic wallet services, like multibit HD, electrum and GreenAddress, for example. Users must take care – without the 24 word seed recovery phrase, users will be unable to restore their wallet, should trezor be lost or broken. It is extremely important to securely store the passphrase offline.

After the initial setup, transactions are extremely simple using trezor. Wallet access is protected by the same pin method explained above, and transactions are confirmed on the device, which stores the private seed. The mytrezor interface is very simple, reflective of other web wallets reviewed.

The biggest issue with Trezor, of course, is that it cannot plug into a phone, and thus on the go trading is not possible. Thus, Trezor really should be used for storing bitcoin savings securely, while a different wallet should be used for day to day transactions. Bitcoins can, of course, be accepted by Trezor addresses at any time.

Mobile

Trezor is compatible with Mycelium on Android devices. The Trezor device must be plugged directly into the Android phone, done by attaching the Trezor USB to an on the go cable, which must be purchased separately. From within the Mycelium wallet, the Trezor cold storage wallet can be accessed, and coins sent. The same pin interface described above is utilized to confirm transactions, and the private key remains solely on the Trezor. This offers the unparalleled security of Trezor with the convenience of Mycelium’s mobile solution. Next up, iOS.

Bottom line

Trezor has made an extremely user-friendly cold storage system. For those with a good amount of bitcoins, the peace of mind brought by Trezor is worth it’s $119 price tag. The only other client-side cold storage system worth considering is Armory. However, it requires an additional offline computer for use, is not at all portable, and there is greater complexity in the setup and subsequent use, including the downloading of the bitcoin client.

If you have an additional computer laying around, Armory is a cheaper solution, and might be right for you provided you can handle the more difficult method of transferring bitcoins to and fro.

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