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If the private keys never leave the TREZOR, how can they be restored if I lose it? I am assuming that maybe the private key is generated on the TREZOR and then encrypted before being sent to SatoshiLabs where they only have encrypted data that requires a few of the 24 words to unencrypt. Can anyone validate this or tell me how it is actually done. I guess my concern is that I don't have control over my private key...
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The Trezor generates a seed offline on your device. Neither the private key nor this seed are ever shared with SatoshiLabs.
In fact, you're in sole control of your private key: when you first set up your Trezor, you're being shown the 24 words that encode your seed. You have to write these words down and keep them as a backup. When you lose your Trezor, you can use these 24 words to regenerate your wallet by putting them into another Trezor, or using compatible software that performs the same key derivation.
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The Trezor wallet is a Hierarchical Deterministic wallet. This means that the entire wallet is derived from the seed. The seed is encoded as the 24 word mnemonic which is what you have to backup. To restore the wallet, you enter the mnemonic which is converted to the seed. The private keys are then derived from the seed, and since it is the same seed and algorithm, you will get the same private keys when you restore.
The Trezor (or any other hardware wallet) will not send any data back to the manufacturers. If they did, they would lose all of their reputation and the devices would not be safe nor recommended.
It took me five times reading to realize what you meant by "[…] the private key is generated on the TREZOR and then encrypted before being sent to TREZOR[…]". I've edited your question slightly to make it a bit clearer. I hope that I understood your intention correctly. – Murch – 2017-06-17T22:27:11.663