How does Trezor not know your seed phrase?

Based on the most helpful WSO content, here's what you need to know about the security of hardware wallets like Trezor:

1. Seed Phrase Generation:

   • When you set up your Trezor device, it generates a seed phrase (a series of words) that acts as a backup for your wallet. This seed phrase is generated on the device itself, not on any external server or software.

2. Open Source Software:

   • Trezor's software is open source, meaning that its code is publicly available for anyone to inspect. This transparency allows the community to verify that the software does not have any hidden functions that could compromise your seed phrase.

3. Offline Generation:

   • The seed phrase is generated offline, directly on the Trezor device. This means that it is never exposed to the internet or any external systems, significantly reducing the risk of it being intercepted or stored by third parties.

4. User Responsibility:

   • It is crucial for users to follow best practices for securing their seed phrases. This includes writing it down and storing it in a safe place, ideally offline. The majority of people who have been hacked haven't been following protocol: keep your coins in a wallet, ideally an offline hard wallet.

5. Security Protocols:

   • The most secure way to store bitcoin is on encrypted hard drives that aren't connected to the internet. For most people currently researching BTC, chances are you will be a casual buyer. Coinbase, for example, is insured for all coins it holds and would issue payouts in the event of a site-wide breach. Coinbase also follows similar offline storage techniques to help combat potential breaches.

By following these protocols and understanding the security measures in place, you can be confident that your seed phrase and, consequently, your crypto assets are safe. If you have any more questions or need further clarification, feel free to ask!

Sources: Some Thoughts on Bitcoin, Part 2, $10,000+ Bitcoin: How might it get there?, Some Thoughts on Bitcoin, Part 2, $10,000+ Bitcoin: How might it get there?, How to Get Started in Cryptocurrencies? General Crypto Thread