Trezor® Hardware® - Wallet (en - US)

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Wallet

This is probably one of the most used terms you will see in the cryptocurrency world. While it may seem quite straight-forward, confusion can arise when the term is used in a wrong context. Let’s have a closer look at what we mean by the word “wallet”.

Compare your Trezor with the wallet that you carry with you on a daily basis. In your wallet, you may have debit cards to different bank accounts, credit cards, personal documents, fiat bills, maybe even different currencies. The wallet in your Trezor is similar — there are separate pouches for different currencies: one for Bitcoin, one for Ethereum, also one for your U2F identity, etc. Everything you need is in one wallet.

Sounds a bit like the Recovery Seed described in our previous article, doesn’t it? Each seed generates only one wallet, and your Trezor lets you manage its contents. Therefore, under normal circumstances*, you have exactly one wallet “in” your Trezor.

This wallet is further subdivided into currency-specific wallets, such as your Bitcoin wallet, Ethereum wallet (incl. ERC-20 tokens), Litecoin wallet, Zcash wallet, and so on. All are derived from the same seed, but managed separately for better orientation.

* If you use passphrases, each passphrase generates a separate wallet which can only be recovered with both the seed and the passphrase. Using two passphrases creates three wallets in total — the two behind passphrases, and the one without a passphrase.

This chart shows how each cryptocurrency you use is derived from the same seed. Using a passphrase would create a new set of wallets completely unrelated to the ones above.

Accounts

Unlike a wallet, of which you only have one per seed, you can have multiple separate accounts for each currency. Compare this to your bank accounts — you might have a Checking account and a Savings account. As they are separate accounts, they are completely independent, save from the fact that they are generated from the same seed. Account A does not see what is in Account B, etc.

Trezor Suite, the desktop and web interface for your hardware wallet allows up to 10 accounts of a single type per currency per wallet. This is a practical limitation, as it decreases the load on our servers.

Bitcoin has several account types reflecting technological changes over time. Taproot P2TR, SegWit P2WPKH, Legacy SegWit P2SH-P2WPKH and Legacy P2PKH Account types are each counted as a single account type, and therefore 10 of each can be used at once.

Notice that for Ethereum this might be a little different. Technically, both ETH and ETC do not use multiple accounts, instead they separate accounts by addresses. More details in the next section.

Each account generates its own distinct addresses. Switch between accounts using the left-hand menu.

Addresses

Bitcoin-like cryptocurrencies

Like there are many accounts in a wallet, there are many addresses in an account. You can send your coins to any of the addresses belonging to an account, and they will be lumped together under that account, available to spend all together or in parts. (This is in contrast with accounts — you cannot spend coins from two different accounts in one transaction.)

Account 1 sees all the coins sent to any addresses belonging to Account 1 (for a specific currency), but it does not see coins sent to addresses from Account 2.

Bitcoin also has change addresses: any time you send a transaction, all the coins stored in an account are sent together. Some goes to the payee, while the leftover change goes to a new address owned by you. Change is sent to a new address instead of the original one, in order to maintain your privacy. Spending from these change addresses is as seamless as spending from a normal addresses; you won’t see a difference.

By using different addresses for every transaction you are maintaining a high level of privacy, as you make it more difficult to track where your coins go. It is not possible to deduce that this and that address belong to the same account, unless you reveal the account XPUB (extended public key), which lets all addresses to be revealed at once.

Ethereum, Ethereum Classic and ERC-20 tokens

As previously mentioned, technically Ethereum does not have many accounts. Instead, it considers single addresses as separate accounts. This means that there are no change addresses, but also that you cannot send one transaction from multiple addresses.

Moreover, ERC-20 tokens are stored on Ethereum (ETH) addresses. In order to send them, you will need to have Ether available on the same address as the tokens.

Therefore, this simplifies things a little bit — while using Ethereum, only use one address for one account. If you want to separate accounts, use multiple addresses.