- A seed phrase is crucial for accessing and recovering crypto wallets. It is typically a sequence of 12, 18, or 24 words generated by your wallet, containing all private key data.
- There are multiple ways to store your seed phrase, each with different risk profiles. These include writing it down, using metal backup tools, taking Polaroid photos, using encrypted USBs or air-gapped PCs, backup hardware wallets, and seed phrase management services.
- Some of the universal rules for storing a seed phrase include keeping it offline, never sharing it, having a recovery protocol, and possibly splitting it into parts for added security.
- Avoid storing your seed phrase on your phone, in an email, as a digital photo, or in a day-to-day notebook due to risks of hacking, theft, and accidental exposure.
Best Seed Phrase Storage Options
The way you handle seed phrase storage is the central question that can make or break your crypto security. We’re not kidding!
It’s estimated that millions of BTC has been lost forever due to stolen, malfunctioning or lost bitcoin wallets. So much BTC is lost in this way each year that these losses were factored into Bitcoin’s economic model by Satoshi himself when he designed the Bitcoin protocol.
But we digress. What’s important is that all of this could have been recovered if the owners had retained their seed phrase
Securely storing your seed phrase involves multiple important considerations, such as accessibility, security, privacy, durability and whether or not a storage device is online. Mistakes can be critical and can even result in losing your crypto holdings. In this article, we’ll explore the best storage options to keep your seed phrase safe.
What’s a seed phrase (or recovery phrase)?
A seed phrase, also known as a mnemonic or a recovery phrase, is a sequence of words generated by your cryptocurrency wallet. This phrase is typically 12, 18, or 24 words long, selected from a list of 2048 designated words as dictated by the BIP39 protocol.
The seed phrase contains the data for every private key the wallet stores, allowing you to recover your funds on virtually any other crypto wallet. For example, you can create a wallet using MetaMask and then use the seed phrase to recover your funds on Trust Wallet. It therefore functions as a sort of master key to access all your crypto assets if you ever lose access to your wallet.
Seed phrase risks
Your seed phrase is designed as a security measure, ensuring you never lose access to your crypto even if your wallet is lost or stolen. But it also introduces some risk.
Anyone who has your seed phrase can access your crypto – think of it as the login credentials for your online banking.Similarly, if you forget where you’ve put your seed phrase, or lose it, you won’t be able to recover your crypto if you lose your wallet. This means it’s absolutely critical to carefully consider where and how you’re storing your recovery phrase.
The responsibility for storing the seed phrase falls entirely on you, the user. If you’re feeling a little intimidated by this task, you’re not alone.
Here, we’ll discuss your best options for storing your seed phrase.
Different Ways To Store Your Seed Phrase
Properly storing your seed phrase is crucial for the security of your crypto assets. There are multiple options for storing your seed phrase, each with different risk profiles.
Write It Down
The most straightforward way to save your seed phrase is to simply write it down. This can be done on a piece of paper, in a notebook, or anywhere else. It’s easy, it requires nothing out of the ordinary and you can always do it. The potential downside is that you can make a mistake while writing the words down, making the seed phrase unusable. Due to the fragile nature of paper, it might get damaged by the elements, leading to the same result.
Metal Seed Phrase Backup Tool
What’s sturdier than paper? Metal! If you want to make your seed phrase resistant to fire and water, choosing metal is the right choice. With a metal backup tool, you can ensure that your seed phrase is more secure when compared to paper. It’s essential to use a high-quality material and store it in a secure, secret location. Multiple products on the market offer this sort of service such as Trezor, Blockplate and others. Unlike paper, this method requires a specific tool and an extra investment.
Polaroid Photo
Another popular offline method for storing your seed phrase is to just make a polaroid photo. Polaroid cameras create a photo shortly after taking a picture, allowing you to create a copy of the seed phrase without connecting to the internet. There’s no chance of making a mistake but much like the paper option, the photo is still prone to damage so you’ll have to keep it in a secure place.
Encrypted USB or Air-gapped PC
Another possible solution to store your seed phrase is by using an encrypted USB or an air-gapped PC. You can upload your seed phrase to an offline computer that’s not connected to the internet in any way (or any other device). Alternatively, you can also store your seed phrase on an encrypted USB drive that is password-protected. With both methods, the risk of a human error in storing the seed phrase is down to zero. The downside here is that both the PC and the USB drive can eventually fail, causing the loss of your seed phrase. This method offers a balance of security and accessibility but requires careful handling to avoid exposure.
Back-Up Hardware Wallet
If you’re using a hardware wallet (often referred to as a cold wallet), you can enter your seed phrase into a separate hardware wallet as a backup. To create a backup device for your initial wallet, you can use your seed phrase when setting it up. Enter the words in the correct order into your second device using the restore option to establish a backup. This method boosts security but it requires the purchase of a hardware wallet. In addition, if you already have a cold wallet, the second one will be redundant, used solely to store a seed phrase.
Use Seed Phrase Back-Up Services
If you sign up for a seed phrase management service, you might be able to recover access to your wallet and your seed phrase even after losing them. These management services incur additional fees but split your recovery phrase into unreadable shards and save it on your behalf. On the plus side, they offer convenience and security. On the downside, you’ll have to trust a third party to manage your seed phrase for you. Management services may also be more vulnerable to hacking, as any security breach within the company could expose personal data. Some users see them as the last resort to recover lost funds while others think they contradict the decentralization and privacy principles of crypto.
Why is safe seed phrase storage important?
The seed phrase for your crypto wallet is probably your most significant piece of digital data. It’s a back door to all your blockchain addresses, making it essential for accessing your crypto assets. The seed phrase also ensures interoperability, allowing you to use the seed phrase with any wallet, but this also means you’re vulnerable if it’s compromised. Anyone who gets a hold of your seed phrase will be able to get direct access to all your assets associated with that wallet. That’s why storing it properly is so important.
Seed phrase storage cardinal rules
How can you make sure your seed phrase remains secure? There are some universal pillars for storing your seed phrase safely.
Keep your recovery phrase offline
We’re used to saving everything on our devices connected to the internet. It’s easy, it’s convenient and you can get access from multiple devices. When it comes to seed phrase security, online storage faces risks such as hacks, malware, and spyware. If your device gets compromised by a hacker, they can get access to all your accounts and data, including your seed phrase. Keeping your seed phrase offline will minimize these threats by removing the digital attack vector completely.
Never share your recovery phrase
Your seed phrase is the master key to your crypto wallet. Anyone who has access to your seed phrase can have full remote control over all the digital assets in your wallet. If you share your seed phrase anywhere, you’ll be fully compromising your security. Never share your seed phrase in public and never write it anywhere on the internet. Remember, no legitimate entity will ever ask you for your seed phrase, if anyone ever does, know that they have some malicious intentions.
Establish a protocol for a rainy day
In case of an emergency, you should have a plan to easily collect your seed phrase and prevent anyone else from seizing it. This can include keeping your seed phrase close to your location so you can easily pick it up when an emergency arises.
Split your recovery phrase into different parts
Dividing your seed phrase into parts and storing them in separate locations can enhance your overall security. However, this method also introduces the risk of losing one of the parts, which could make recovery impossible. One alternative way to go about it would be to memorize a small part of the seed phrase and avoid including it in the other parts. This, however, can make things unnecessarily complicated and should you forget the words and their order, your seed phrase will be unusable.
Places you should NEVER store your seed phrase
We’ve covered some of the places where you can safely store your seed phrase. But what about the worst ones? Here are a few examples with the absolute no’s.
On your phone
Your phone, much like your computer, can be the target of a hack, spyware, and malware. Even worse, your phone can also be stolen and the information on it copied. Storing your seed phrase on it is definitely a bad idea.
In an email
Emails and email providers can be hacked. These days, most of us are using emails that are associated with certain accounts. If the account gets compromised, so does the email. All of this provides easy access to your seed phrase for malicious actors.
Digital photos
The same argument goes for digital photos taken on your phone or device. They can be hacked, stolen and accessed by malware programs or hackers. Digitally stored photos can be an easy attack vector so avoid using them to store your seed phrase.
With a friend
Telling the seed phrase to a close friend might seem like a good idea but it introduces a couple of risks. Relationships with people come and go, and there’s always the possibility of an accidental disclosure or loss. Increasing the number of parties who know your seed phrase is generally a bad idea.
In a day-to-day notebook
Day-to-day notebooks are an especially bad choice because anyone in your household or your job can get access to them. Notebooks can also be lost or misplaced, further compromising the security of your seed phrase.
Closing thoughts
Crypto gives users the freedom of financial independence, balanced with the responsibility of securing their own assets. Seed phrase storage is a crucial aspect of this responsibility, requiring a careful balance between security and accessibility. Proper seed phrase management is essential for maintaining control over your digital assets. Understanding the risks associated with different storage methods can help you make informed decisions to better protect your crypto holdings. By adopting best practices and choosing the right storage options, you can ensure the safety of your digital assets, giving you peace of mind in the volatile world of cryptocurrency.
FAQs About Seed Phrase Storage
What is the best place to store my seed phrase?
The best place to store your seed phrase is in a secure, private, and offline location, such as a metal backup tool stored in a safe.
Should I store my seed phrase in different places?
It depends what you mean by different places. By splitting your recovery phrase and storing it in different locations, you ensure that even if someone finds one part, they can’t access your crypto. However, you also introduce the risk of losing one part, leaving you with no way of recoveering your crypto. Conversely, you might wonder if you can keep multiple copies of your recovery phrase in different locations. While this decreases your risk of ever losing the phrase, it also increases the risk that someone else will find it. So whatever you choose, it merits careful consideration.
