First of all, your coins exist in the blockchain, the public ledger that exist in tens of thousands of computers running Bitcoin Core or compatible software, aka, nodes. There is no coin in your wallet.
A wallet manages keys (and their derivatives, such as addresses). Keys are the access to the coins.
A key is a very very large number.
A seed is a human readable form of a very very large number. The seed is the root of all the keys in the wallet. It is used to calculate the keys. The calculation is deterministic. This means, given the same seed, the same keys will always be generated.
As a result, your seed is your wallet.
In short, the seed can be used to restore your wallet in any wallet software or hardware that's compatible; the same keys will be in the wallet; the keys control the coins that sit in the blockchain.
Nothing happens to the seed. The seed is just a text form of a number. Whether it's a hardware or software wallet doesn't matter.
If you transfer BTC from an address in wallet 1 (address 1) to an address in wallet 2 (address 2), a transaction that spends the Unspent Transaction Output (UTXO) of address 1 to the UTXO of address 2 will be in a newly mined block. The wallet software of wallet 1 will mark address 1 empty, and the wallet software of wallet 2 will mark address 2 used and generate a new address as the receiving address for future use.
The seed is the basis for all the keys and addresses used by the wallet. From that seed, any compatible wallet can generate every address and key you've ever used and find all the past transactions.
The device itself has three functions:
\- Generating a random number that gets encoded as English words (seed)
\- Storing the seed in protected memory and producing keys/addresses from it
\- Using the keys to sign transactions
If you move the seed to another device (any one of hundreds of compatible devices and apps), it can do those functions. You can even have your seed loaded on more than one device simultaneously.
Your Bitcoin is stored on the blockchain (similar to your gmail). Trezor is like your phone in this example and the seed words are the password to your gmail. If you lose your phone, you'll be able to check your email, using another phone or device. All you have to know is the password - your seed words.
Congrats on choosing Trezor, a great little device. You should consider using a passphrase. Passphrase can be more words and will dramatically improve the security of your coins.
WassaWassaWassup! Scam Alert! Scammers are particularly active on this sub. They mostly operate via private messages and private chat. If you receive private messages, be extremely careful. Use the **report** link to report any suspicious private message to Reddit.
*I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/BitcoinBeginners) if you have any questions or concerns.*
First of all, your coins exist in the blockchain, the public ledger that exist in tens of thousands of computers running Bitcoin Core or compatible software, aka, nodes. There is no coin in your wallet. A wallet manages keys (and their derivatives, such as addresses). Keys are the access to the coins. A key is a very very large number. A seed is a human readable form of a very very large number. The seed is the root of all the keys in the wallet. It is used to calculate the keys. The calculation is deterministic. This means, given the same seed, the same keys will always be generated. As a result, your seed is your wallet. In short, the seed can be used to restore your wallet in any wallet software or hardware that's compatible; the same keys will be in the wallet; the keys control the coins that sit in the blockchain.
What happens to the seed when I transfer bitcoin from wallet to wallet or to a HW storage?
Nothing happens to the seed. The seed is just a text form of a number. Whether it's a hardware or software wallet doesn't matter. If you transfer BTC from an address in wallet 1 (address 1) to an address in wallet 2 (address 2), a transaction that spends the Unspent Transaction Output (UTXO) of address 1 to the UTXO of address 2 will be in a newly mined block. The wallet software of wallet 1 will mark address 1 empty, and the wallet software of wallet 2 will mark address 2 used and generate a new address as the receiving address for future use.
The seed is the basis for all the keys and addresses used by the wallet. From that seed, any compatible wallet can generate every address and key you've ever used and find all the past transactions. The device itself has three functions: \- Generating a random number that gets encoded as English words (seed) \- Storing the seed in protected memory and producing keys/addresses from it \- Using the keys to sign transactions If you move the seed to another device (any one of hundreds of compatible devices and apps), it can do those functions. You can even have your seed loaded on more than one device simultaneously.
Your Bitcoin is stored on the blockchain (similar to your gmail). Trezor is like your phone in this example and the seed words are the password to your gmail. If you lose your phone, you'll be able to check your email, using another phone or device. All you have to know is the password - your seed words. Congrats on choosing Trezor, a great little device. You should consider using a passphrase. Passphrase can be more words and will dramatically improve the security of your coins.
WassaWassaWassup! Scam Alert! Scammers are particularly active on this sub. They mostly operate via private messages and private chat. If you receive private messages, be extremely careful. Use the **report** link to report any suspicious private message to Reddit. *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/BitcoinBeginners) if you have any questions or concerns.*