How to Set Up a Cold Wallet

A step-by-step guide to getting started with your Ledger Nano S Plus.

Author

Max
February 23, 2024

GM everyone,

Today I want to walk you through the process of setting up your cold wallet.

As a reminder, there are three ways to buy and hold crypto:

  1. You buy it on an exchange and leave it there. (Click here for my step-by-step guide on buying crypto on an exchange.) → Unless you're a day trader, I don't recommend this option because leaving your crypto holdings on an exchange exposes them to risks like hacks.

  2. You buy ETFs. → When using this option, it is important to note that you don't own the asset itself. The ETF provider will hold the crypto for you and give you exposure to it. However, I understand that for many people it is very convenient to get exposure to a crypto asset and not have to hold the asset itself. However, currently, there are only bitcoin ETFs available. Ether ETFs may be approved in May. It is highly unlikely that any other crypto ETFs will be approved soon.

  3. You buy crypto on an exchange and move it to a cold wallet. → That's what I do, and that's what I recommend to anyone who wants to hold bitcoin and crypto for the medium to long term. (Let's say at least 4 years).

So today I'm going to give you a step-by-step tutorial on how to set up your cold wallet with Ledger. I'm going to talk about the Ledger Nano S Plus, which is the cheapest product Ledger offers and which will be sufficient for beginners and intermediates who want to hold crypto on a cold wallet.

Before we get started, let me remind you that this newsletter is not financial advice. It is general in nature, does not take into account your financial situation, and is for educational purposes only.

Because I'm talking about Ledger today, this newsletter contains affiliate links. This means that I may receive a commission from them. But for Crypto Down Under, I only choose products that I use myself and that I can recommend wholeheartedly. I've been using my Ledger Nano S Plus for about 4 years now and I love it!

Let's get into it.

How to get your Nano

  • Use this link to navigate to the Ledger shop.

  • Select the Ledger Nano S Plus. In Australia, it currently costs AUD139. It supports more than 5000 coins (read here why you will only want to buy and hold 3 to 5 coins), is compatible with macOS, Windows, and Android, and comes with a USB-C cable. If your computer doesn't support USB-C, you can get the Ledger OTG Kit, which is also available in the shop.

  • Happily wait for your Nano to arrive.

How to set up your Nano

  • Go to www.ledger.com/ledger-live to download the Ledger Live App to your computer. Ledger Live is your one-stop shop for navigating your Nano.

  • Once it's installed on your computer, open the app, click the "Get Started" button, and read and accept the Terms of Use.

  • Select the Nano S Plus as your device.

  • Click on "Set up a new Nano S Plus".

  • You will be presented with some educational content and some reminders. Be sure to read the content and pay attention to the reminders.

  • When you reach the screen below, connect your Ledger Nano S Plus to your computer using the USB-C cable (or the Ledger OTG Kit).

  • Once your Ledger Nano S Plus is turned on, use the buttons on the top of the device to navigate through the menu. Use the right button to click right and the left button to click left. Navigate to "Set up as new device". Press both buttons simultaneously to select.

How to set up a PIN for your Nano

  • Your Nano will prompt you to set up a 4 to 8 digit PIN. Press both buttons at the same time to start setting a PIN.

  • Use the buttons to find the PIN you want, then press both buttons to confirm. Your Nano will prompt you to confirm the PIN. Repeat the process.

  • Once you've successfully confirmed your PIN, the screen will prompt you to "Write down your recovery phrase".

How to write down your recovery phrase

Remember, this is the most important part of setting up your Nano. The whole purpose of using a cold wallet is to store your private keys offline.

Cold = not connected to the internet.

Therefore, do not use apps, password managers, or screenshots to save and store the recovery phrase. This defeats the purpose of a cold wallet.

It's important to understand that your recovery phrase serves as a backup of your private keys. As long as you have your recovery phrase, you will always be able to access your crypto assets, even if you forget your PIN, your Nano resets, or you lose your Nano.

This is why it is so important that you keep your recovery phrase in a safe place. Anyone with access to your recovery phrase can steal your crypto assets without even having access to your Nano.

  • Grab one of the recovery sheets that come with the box contents.

  • Start with word #1.

  • Write the word next to the correct number on the recovery sheet.

  • Repeat this process for all 24 words of your recovery phrase.

  • Once you've done this, your Nano will prompt you to confirm your recovery phrase. Confirm each word in order. Repeat this process for each word.

  • When you're done, the screen will tell you that "Your recovery phrase is set". Scroll to the right and press both buttons to continue.

  • After a moment of processing, the screen will tell you that "Your device is ready".

  • Now go back to the app on your computer.

  • You will again be presented with some educational content. Answer the quiz to proceed.

  • Click on "Check my Nano".

  • Press both buttons on your Nano when it says "Allow Ledger Manager".

  • Once the check is successful, proceed to the Ledger Live dashboard.

  • That's it! Your Ledger Nano S Plus is set up!

To receive and store coins, you need to install apps and create accounts. I'll cover that in next week's newsletter. If you want to watch a video that summarizes today's step-by-step tutorial, check out this guide from Ledger on YouTube.

Talk to you guys next week!

Before you go, please help me get better! 🙏 

Feel free to drop me an email or dm me on Instagram, LinkedIn, or Twitter with any feedback or topics you'd like to see covered in this newsletter!

Thank you! 🤜 🤛