Not Your Keys—
Not Your Coins.
It bears repeating, trust me.
A Mnemonic Seed Phrase, also known as a Recovery or Seed Phrase, is a set of words that are used to recover the Private Keys of a cryptocurrency wallet.
A Mnemonic Seed Phrase is typically a series of 12 to 24 words that are generated when you create a new cryptocurrency wallet. These words are chosen randomly and are used to generate the Private Key for your wallet.
The Private Key is a secret number that is used to authorize and verify transactions. This Private Key is the only thing that gives you control over your crypto or digital assets. Anyone who has the Private Key has control over the funds in that wallet.
Obviously, it’s extremely important to keep your mnemonic seed phrase in a secure place, (not online or on your phone/computer) as it is the only way to access your wallet and the funds it contains if you lose access to your wallet or forget your password.
You really should not ever need this Seed Phrase because you will have a password or a PIN to access the wallet.
But if you forget your PIN, or lose your password or the wallet itself — the Recovery Seed Phrase will be your only hope. To use your Mnemonic Seed Phrase to recover your wallet, you will typically need to get a new wallet and enter your Seed Phrase when you’re setting it up for the first time. Once you do this, the new wallet will be an exact copy of the wallet that you lost access to. If you were to find the old wallet later on, it would simply be a copy of this same wallet.
How Do I Store My Seed Phrase Safely?
It’s extremely important that you store your mnemonic seed phrase in a secure and safe place,. This is the only way to access your crypto wallet (and the funds it contains) if you lose your wallet or forget your password.
Here are a few tips for storing your seed phrase safely:
- Write it down:
One option is to write your seed phrase on a piece of paper and store it in a secure location, such as a safe or a lockbox.
You can also store it in a physical wallet or other secure storage device, such as a USB drive or an offline hardware wallet. - Use a Password Manager:
Some password managers, such as LastPass or 1Password, allow you to store your seed phrase in a secure, encrypted manner. This can be a good option if you don’t want to write down your seed phrase or are worried about forgetting it. - Memorize it:
Another option is to memorize your seed phrase.
Good luck with this option unless you’re a super genius. Even then, what if something happened to you unexpectedly? This can theoretically be more secure than writing it down, but it poses new risks.
The obvious danger… hang on, I forgot what it is.I’m sure it’ll come to me in a minute.
Regardless of which method you choose, make sure that your Seed Phrase is kept private and secure.
Do not share your seed phrase with anyone.
Do not store it in an online location like Dropbox or in a Google doc or on an unencrypted device that’s connected to the internet.
Think about it, if your Seed Phrase looks like a Seed Phrase and it’s easily seen — an unscrupulous person might just be tempted to take a quick photo of it or copy/paste it and then you can say goodbye to that wallet.
Pro Tip:
Consider breaking your Seed Phrase into smaller pieces and keeping them in different places.
For example:
6 words in the safety deposit box and with my friend Steve. The other 6 words in my fireproof safe hidden behind a painting in my hallway and also stored as a note in my password manager app.
Or even consider using a Shamir backup if you really want to take this to the next level.
Shamir Backups
Shamir’s Secret Sharing is a method for dividing a secret into smaller pieces, known as “shares,” such that a minimum number of shares are required to reconstruct the secret. This can be used as a way to secure a mnemonic seed phrase, as it allows you to create multiple shares of the seed phrase and store them in different locations.
Using Shamir’s Secret Sharing allows you to create multiple copies of the seed phrase and store them in different locations. This can help protect against the loss or destruction of a single copy of the seed phrase.
However, it is important to carefully consider the security and accessibility of the shares. It is generally best to store the shares in secure locations, such as a safe or a lockbox, and to limit the number of people who have access to the shares.
Additionally, you should be careful to keep track of the minimum number of shares required to reconstruct the seed phrase, as you will need to have access to this minimum number of shares in order to access your wallet.
Overall, using Shamir’s Secret Sharing can be a great way to secure your mnemonic seed phrase, but it is important to carefully consider the security and accessibility of the shares.
We have a breakdown of the Shamir Backup for Trezor here, if you’re interested in taking this to the next level.
