redonion said:What is the technology behind hardware wallets and how they recover your bitcoins?
I have a friend who physically lost his Trezor, but was able to recover all of his coins via his 30-word passphrase and a new Trezor. This makes me think that the coins aren't physically stored on an individual Trezor, and there must be some central registry somewhere for him to do the recovery. If this is true, doesn't this contradict the security features of a hardware wallet? What would happen if Trezor closed shop and went out of business?
The "central registry" is the blockchain that's the technology behind cryptocurrencies.
Read up on it or wait for someone here more knowledgeable than me to give a brief primer (assuming that's even possible in less than a few pages), but as far as I've rudimentarily understood it and remember it, it's (and many cryptocurrencies have their own blockchain technology so there can be differences) a decentralized ledger consisting of blocks of data - transaction and various other things, for Ethereum for instance it can also be executable program code - connected into a chain, and it's pretty much impossible to go back and change individual blocks because that would mean having to modify every single connected block in the chain to reflect changes.
As such hacking attempt of blockchains would be prohibitively expensive in computation power, just like crypto mining energy costs are now higher than those of some individual countries.
The wallet is... I think someone used the term keychain earlier?... to your data, addresses, transactions etc. on the blockchain. And it can thus be restored with your seed to any wallet that supports the same encryption standards for the seed.