What the recovery phrase is, how to store it on paper or steel in two places, what to do if a device is lost, and inheritance.
Basics
When you create a wallet it shows you 12 or 24 ordinary words. That is the recovery phrase, also called the seed phrase. Every key in the wallet is calculated from those words, so the phrase is a complete copy of the wallet. The device is replaceable. The phrase is not.
What the phrase can do
Anyone who has the words can rebuild your wallet on their own device and move the bitcoin. They do not need your device or your PIN.
If you have the words, you can rebuild your wallet after a loss, a fire or a broken device.
If nobody has the words and the device is gone, the bitcoin stays on the network forever and nobody can move it. No company can reset it.
How to store it
Write the words by hand, numbered and in order, on the card that came with the wallet. Check the spelling of each word.
Make a second copy. For a larger balance, stamp or engrave the words on a steel plate: paper burns and fades, steel does not.
Keep the two copies in two different places you control, for example a safe at home and a safe deposit box or a trusted family home. One fire or one burglary should not reach both.
Keep the phrase apart from the device. A thief who finds both together has everything.
Once a year, check that both copies are still there and still readable.
What never to do
Never photograph it. Photos sync to cloud accounts, and cloud accounts get broken into.
Never type it into a website, a notes app, an email, a password manager or a chat. The only place a phrase is ever entered is the wallet device itself, during a restore.
Never say it to support. No real support agent, from a wallet maker, an exchange, a pool or Firsthand Bitcoin, needs your phrase. A person who asks is a thief, however helpful they sound.
Never store it in pieces across apps. Half in an email and half in a photo is two leaks, not one protection.
Careful: The most common way owners lose bitcoin is not hacking. It is a message that looks like wallet support and a page that asks for the recovery phrase to 'verify' or 'sync' the wallet. There is no such thing. Close the page.
If your device is lost, stolen or broken
Stay calm. Without the PIN, the device does not give up the keys quickly, and your bitcoin is on the network, not in the device.
Get a new device from the official source. It does not have to be the same model, but the same brand is simplest.
Choose the recover option and enter your phrase on the new device. Your balance and addresses come back.
If the old device was stolen, or the phrase may have been seen, create a brand-new wallet with a new phrase and send the bitcoin to it. Then give Firsthand the new payout address.
Good to know: A restored wallet has the same addresses as before. If only the device was lost and the phrase is safe, your payout address keeps working and nothing needs to change on your Firsthand account.
Inheritance
If something happens to you, your family can only reach the bitcoin if they can find the phrase and know what it is. Write a short letter in plain words: what the wallet is, where the phrase copies are kept, and who to ask for help. Keep the letter with your will or your important papers, not with the phrase itself. Tell one trusted person that the letter exists. For the legal side of passing on assets, speak to a lawyer in your country: this guide is not legal advice.