Crypto Safety: Securing Your Seed Phrase

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We recently received a question from a concerned crypto novice about crypto safety. The question reads:

“For a person like me who has a bad habit of forgetting passwords, how would it make sense to get into cryptos since they involve a unique string of 150+ characters and digits that you must never lose? If you lose this code, you lose all your money… right? Or was I misinformed? And if this IS true, how many doofuses, er, people have lost their money this way?”

This question has been on the minds of many crypto industry participants and is a significantly important topic to always contemplate. It is 100% possible to lose your funds permanently if you forget your password—also known as the seed phrase. This is one of the costly trade-offs of self-custody, or as many would say “being your own bank.”

Countless uninformed “doofuses” have lost their crypto assets through this means, including the questionnaire, albeit a negligible amount.

That said, it is advisable to have some valuable knowledge about storing your seed phrases, some of which have been highlighted in this article. But before we go into that, what exactly is a seed phrase?

Simply put, a seed phrase is a string of 12 to 24-word sequences randomly selected and protects your wallet. For those opting for self-custody of crypto assets, your seed phrase is your masker key. The seed phrase is the only means through which you can unlock your wallet, indicating just how important this random string of words is.

Crypto Safety: Few Ways to Keep Your Seed Phrase Safe

Moving on, here are some tips to help you secure your seed phrases against compromise and loss.

Safety First

The first thing you should realize is that your seed phrase should never be stored on the internet or your computer. Always store offline for better protection.

Purchase a Hardware Wallet

Hardware wallets are physical storage devices used for storing seed phrases (and private keys) offline.

Write Down Your Seed Phrase in a Few Secure Places

Write out your seed phrase on a piece of paper or several pieces for easier access, and store them in several secure locations. Once again, never store your seed phrase online.

With these little tips, you should be protected from losing your wallet master key.

 

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Azeez Mustapha

Azeez Mustapha is a trading professional, currency analyst, signals strategist, and funds manager with over ten years of experience within the financial field. As a blogger and finance author, he helps investors understand complex financial concepts, improve their investing skills, and learn how to manage their money.