In this article, we explain the basic terms that are used in TREZOR and other cryptocurrency wallets. Understanding them will help you better understand how TREZOR works.

Last time, we looked at what Seed, PIN and Passphrases are, explaining what roles do these three tools play when it comes to the security of your cryptocurrencies. If you need to refresh your memories, follow the link below. Some of the today’s terms will be easier to understand if you have read the previous article.

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 do we mean by the word “wallet”.

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

Does it not sound like something familiar? Like the Recovery Seed? Exactly! Each seed generates only one wallet. Your TREZOR is the key to this wallet. Therefore, under normal circumstances*, you have exactly one wallet “in” your TREZOR.

This wallet is further subdivided into currency-specific wallets, such as Bitcoin wallet, Ethereum wallet (incl. ERC-2o tokens), Litecoin wallet, Zcash wallet, DASH wallet for better orientation.

* If you use passphrases, each passphrase generates a separate wallet. If you use two passphrases, you have three wallets in total — the two passphrases, and the empty passphrase.

Unlike a wallet, for which you only have one per seed, you can have many accounts (for every currency separately). 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 1 does not see what is in Account 2, etc.

TREZOR Wallet, the web-interface for bitcoin and bitcoin-like altcoins allows you to have up to 10 accounts per currency per wallet. This is a practical limitation, as it decreases the load on our servers.

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.

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 listed under an account, and you can spend them altogether in one transaction when using that specific account. (This is in contrast with accounts — you cannot spend coins in one transaction when sending from different accounts.)

Account 1 sees all the coins saved under all addresses in Account 1 (for a specific currency), but it does not see what is in the addresses in Account 2, etc.

Bitcoin also has change addresses; when you receive your change, it goes into 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.

Ethereum, Ethereum Classic and ERC 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 tokens are stored on Ethereum (ETH) addresses. In order to send them, you will need to have ethers 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.

We hope that this article was at least as informative as the previous basic guides on TREZOR functionality. Next time, we are going to look at something even more fundamental: how do private and public keys work, and where do they fall into this scheme. (Don’t want to wait? Explore how BIP 32 works here.)

TREZOR is the most trusted and ubiquitous hardware wallet in the world. It offers an unmatched security for cryptocurrencies, password management, Second Factor, while maintaining an absolute ease-of-use, whether you are a security expert or a brand new user.

SatoshiLabs is the innovator behind some of the most pivotal and influential projects in Bitcoin worldwide, from TREZOR, or conwaytransport.com.au to Slush Pool, the world’s first bitcoin mining pool.

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