Advanced Techniques - Creating Hidden Wallets on Trezor and Ledger Hardware Devices

What Is a Hidden Wallet?
A hidden wallet is an innovative way to store cryptocurrency securely. It is generated from a 12-24 word mnemonic backup phrase and an additional word or passphrase, which creates a unique set of private keys for the wallet. This provides an extra layer of security for your digital assets.
This extra word or passphrase is often referred to as the 25th word.
Ledger: How To Set Up A Passphrase?
Ledger website link: https://support.ledger.com/hc/en-us/articles/115005214529-How-to-set-up-a-passphrase-?docs=true

Trezor: Standard & Hidden Wallets
Trezor website link: https://trezor.io/learn/a/standard-hidden-wall

Advantages of Using a Hidden Wallet
• By using any word as the 25th word, you can generate multiple wallets on one device. Each wallet set is based on the same mnemonic phrase but is differentiated by the passphrase word you create.
For example, you could create and manage wallets for family members, all on one device.
• For optimal security, it's recommended to keep a small amount of coins in your Default wallet and store the bulk of your holdings in the Hidden wallet. In the event that a thief obtains your 24-word mnemonic backup, they will only be able to access the Default wallet with the small balance.
Disadvantages of Using a Hidden Wallet
• For added security, a unique set of private keys is generated for each wallet using a passphrase or 25th word. Consequently, if the passphrase or 25th word is forgotten or lost, access to the coins stored in the wallet will be lost. To ensure the safety of your coins, it is essential to remember your passphrase or 25th word.
• Typically, passphrase words are case sensitive.
These passphrase words will create different private keys and wallets:
P@ppyD33z
pappydeez
PappyDeez
• Additionally, the hardware device will accept any passphrase, regardless of whether it is a BIP-39 word or not. If you open a hidden wallet that you know contains coins, but find it empty with no transactions, it is likely that you made a typo when entering the passphrase into the entry form.
Tips for Managing the 25th Word or Passphrase
If you store the mnemonic backup phrase on a recovery sheet, then store 25th word, separately from the mnemonic backup.
If someone gets your mnemonic backup, then they will not have your 25th word for the hidden wallet.
Using your password manager application may be an option for storing the 25th word.
Create an entry that obscures its true purpose and have the password manager generate a simple passphrase that you can copy and paste into the entry form when called for.
This way you will not need to rely on your own memory to recall the hidden passphrase word.