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Yeah, I've had a copy of the block chain on USB before, run bitcoin core on it, but the usbs aren't super reliable. That much read/write seems to be hard on them.
When used to hold an OS and occasionally operate it they last very well esp if you use a good quality one. An OS on a memory stick is essentially what HWs are anyway. My cold wallet lives on a USB memory stick that has never been online and I checked it yesterday- its fine...but yes always keep a secure copy or two of the seed phase too.
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