As a crypto user, you know how crucial it is to keep your Secret Recovery Phrase in a safe and secure place. This is a 12 to 24-word phrase that lets you restore your private keys and access your crypto wallet if you lose or damage your Ledger device.
However, keeping your Secret Recovery Phrase can be difficult and risky. You might misplace it, forget it, lose it, or have it stolen or destroyed by fire, water, or other hazards. If that happens, you could lose access to your crypto assets forever.
That’s why Ledger has created Ledger Recover: a backup service for your Secret Recovery Phrase that makes interacting with crypto more easy and more convenient.
What is “Ledger Recover”?
Ledger Recover is a backup service for your Secret Recovery Phrase, which is a series of words that lets you access your crypto wallet.
You can use this service to securely get back your private keys with a Ledger device and your ID if you ever lose or can’t access your seed phrase.
Ledger Recover is an optional paid subscription service only for Ledger Nano X. It aims to make self-custody easier and less scary for crypto users.
How Ledger Recover Works
Ledger Recover works by creating an encrypted backup of your Secret Recovery Phrase and storing it in three independent providers:
- Ledger
- Coincover, and
- EscrowTech.
Each provider holds a fragment of your encrypted backup, which is useless on its own. Only you can access your backup by verifying your identity with your ID card and connecting your Ledger device.
Here are the steps to use Ledger Recover:
Step 1: Encryption
When you subscribe to Ledger Recover, the secure element encrypts and splits the Secret Recovery Phrase into three fragments. These fragments become the backup of your Secret Recovery Phrase.
Step 2: Identity Verification
Ledger Recover uses your ID and a selfie to verify who you are, via its Identity Verification provider, Onfido. This ensures that only you can access your backup.
Step 3: Storage
The encrypted fragments are securely sent to three independent providers – Ledger, Coincover, and EscrowTech – that store them in Hardware Security Modules (HSMs). These are highly secure devices that protect and manage digital keys.
Step 4: Decryption
The next step in the process is decryption. When you need to recover your crypto account, you will need to verify your identity again with your ID card and connect your Ledger device.
Two of the three encrypted fragments will be sent back to your Ledger device, reassembling them to build your private key. You will then be able to restore your crypto wallet using the decrypted Secret Recovery Phrase.
Read: Ledger Nano S plus vs Nano X vs Stax
How to Set Up Ledger Recover?
To set up Ledger Recover, you will need a Ledger Nano X device and a subscription to the service.
You can subscribe to Ledger Recover on the Ledger website or on the Ledger Live app. You will also need an internet connection and a smartphone with a camera.
Once you have subscribed to the service, you will need to follow these steps:
- Connect your Ledger Nano X to your smartphone via Bluetooth and open the Ledger Live app.
- Go to the Settings tab and tap on Security.
- Tap on Ledger Recover and follow the instructions on the screen.
- You will be asked to scan your ID card and take a selfie using your smartphone camera.
- You will also be asked to connect your Ledger Nano X and give approval for the creation of the backup of your Secret Recovery Phrase.
- Once approved, your Ledger Nano X will duplicate, encrypt and fragment your private key into three parts within the Secure Element chip.
- These encrypted fragments will be securely sent to the three independent providers that will store them in HSMs.
- You will receive a confirmation message on the app once the process is completed.
How to Restore Your Crypto Account with Ledger Recover?
If you lose or don’t have access to your Secret Recovery Phrase, you can use Ledger Recover to restore your crypto wallet on a new or existing Ledger device. You will need an internet connection and a smartphone with a camera.
To restore your crypto account with Ledger Recover, you will need to follow these steps:
- Connect your new or existing Ledger Nano X to your smartphone via Bluetooth and open the Ledger Live app.
- Go to the Accounts tab and tap on “add account”.
- Tap on “Import from the recovery phrase” and select “Use Ledger Recover”.
- You will be asked to scan your ID card and take a selfie using your smartphone camera.
- You will also be asked to connect your Ledger Nano X and give approval to the recovery of your backup of your Secret Recovery Phrase.
- Two of the three encrypted fragments will be sent back to your Ledger device, reassembling them to build your private key.
- You will then be able to restore your crypto wallet using the decrypted Secret Recovery Phrase.
- You will see your crypto accounts on the app once the process is completed.
Pros and Cons of Ledger Recover
Ledger Recover is a convenient and secure backup service for your Secret Recovery Phrase, but it also has some limitations and trade-offs.
Here are some of the pros and cons of using Ledger Recover:
Pros (Advantages of Using Ledger Recover):
- You don’t have to worry about losing, forgetting, or misplacing your Secret Recovery Phrase.
- You can recover your crypto account with your ID and your Ledger device, anytime, anywhere.
- You can enjoy the benefits of self-custody without compromising your security or privacy.
- You can rely on industry-leading encryption and ID verification technology from Ledger, Coincover, and EscrowTech.
- You can benefit from a $50,000 compensation from Coincover in the unlikely event that something goes wrong with the service.
Cons (Risks of Using Ledger Recover)
- You have to pay a monthly or yearly fee to use the service.
- You have to trust third-party providers to store and protect your encrypted backup.
- You have to share your personal information with “Onfido” for identity verification purposes.
- It only supports Ledger Nano X, which means does not support Ledger Nano S Plus and Ledger Stax.
Is My Crypto Still in “Self Custody” After Using Ledger Recover?
Yes, your crypto is still in self-custody after using Ledger Recover. This means that you are the only one who can access and control your crypto assets, without relying on intermediaries or custodians.
Ledger Recover does not store or access your private keys or your Secret Recovery Phrase. It only creates an encrypted backup of your Secret Recovery Phrase that only you can decrypt with your ID and your Ledger device.
Your private keys never leave your Ledger device or the Secure Element chip. Ledger Recover is a backup service, not a custodial service.
How much does Ledger Recover cost?
Ledger Recover is a subscription service that will cost $9.99 per month. To use the service, you must also go through a KYC process with an ID document and a selfie recording.
If you fail to pay the subscription within 7 days, you won’t be able to recover your private keys using Ledger Recover.
After suspension, you have 9 months to reactivate your subscription by contacting Ledger Recover Support and paying a 50 EUR fee and any outstanding balance.
Is it Safe to use Ledger Recover?
Yes, Ledger recover is safe to use. Ledger says that it does not compromise your device or your control over your assets. It makes another backup.
These encrypted pieces are worthless by themselves and can only be unlocked by your Ledger device with your ID verification. Ledger also promises to open-source the code for the Recover feature, so users can check the security of the proposed custody mechanism by themselves.
Conclusion
Ledger is a great service if you have issues with forgetting to lose your backups. It also makes your crypto centralized. Remember, History says “Centralized security systems can be breached and hacked“.
However, some crypto users may still choose to keep their secret recovery phrase offline and avoid depending on third-party services. In the end, the choice depends on your personal preference and risk tolerance.
In the end, we will only say “Not your keys, not your crypto“.
Source: https://www.ledger.com/recover
