Do you want to lose your bitcoins just because of a silly mistake?
If your answer is “No, definitely not”, then read on…
This guide is part of our Bitcoin wallet series. If you are someone who just has purchased Bitcoin from any Bitcoin exchange like CoinBase, CEX, CoinSecure, or any other, first go through these important guides:
- Best Bitcoin Wallets
- Best Bitcoin Wallets
- What are HD Wallets? (Deterministic Wallet)
- Bitcoin Private Keys: Everything You Need To Know
It’s a well-known fact that you should never store your Bitcoin on an exchange. Rather, you should set up a secure wallet like a Ledger or Trezor hardware wallet, or a Coinomi or MyCelium mobile wallet.
When you set up your wallet, you are asked to note down the recovery seed. This is usually 12 or 18 or 24 random words.
Note: It’s also called the seed key, recovery key, seed phrase, etc. They all mean the same thing.
This recovery seed is the most important thing for the safety of your bitcoins. (Note: I’m assuming you are using one of the wallets where you are the real owner of your private keys. If you do not own your private key, you need to move to a wallet where you do. See this post.)
In case you lose your hardware wallet or your mobile phone, it’s only by using this recovery seed that you will be able to recover your bitcoins. Many users make the mistake of ignoring this step while setting up a Bitcoin wallet, and thus, they end up losing access to their bitcoins in the long run.
If you haven’t taken a backup of your wallet’s recovery phrase, you should do that right now.
Now, you may ask:
Where should I keep this recovery seed?
Tip: Store your Bitcoin recovery phrase offline.
The best thing to do is to take a pen and a piece of paper and physically write it down. (Hardware wallets like the Ledger Nano S, Ledger Blue, and Trezor usually come with a “recovery sheet” to write down your seed key.)
You should never store your Bitcoin wallet recovery seed on a note-taking app like Evernote, iOS Notes, or any other easily hackable and losable device. This includes cloud storage places like Dropbox.
Also, it’s not a bad idea to put your key on a brand new USB drive that doesn’t get used for anything else. But only do this after you’ve written it down with a pen and paper. USB drives fail all the time. Don’t rely on technology for something this crucial.
If you’re looking for a place to store your bitcoins for a long time (months and years to come), follow this guide and keep your keys safe.
Best Tips For Storing Your Bitcoin Recovery Seed Safely
Here are a few important things that you should do:
- Don’t think too hard; just take a pen and paper and write down your recovery phrase. Don’t underestimate the power of a pen and paper. For ages, the paper has proven to be one of the most secure ways of handling important data. Archeologists still discover pieces of paper that are hundreds of thousands of years old. Contrast this to a computer which will likely break down in under 10 years.
- Create more than 1 copy of your recovery phrase and keep them all in different (but hidden) places. In the case of a natural disaster (fire, flood, etc.), you will still have access to your other copies.
- Don’t take a screenshot or mobile photo of your recovery phrase because someone can simply hack into your computer/mobile and copy it.
- Never make a digital copy of your recovery phrase; never store it on email or cloud services.
- If you are HODLing a significant amount of Bitcoin, then keep your recovery phrase sheet laminated inside of a fireproof and waterproof vault.
- Divide your recovery phrase into 2-3 parts; put the first 4 words on a piece of paper, another 4 words on another piece, and so on. Don’t forget to number the paper pieces because if you alter their sequence, you will not be able to access your coins.
- Use the “advanced recovery phrase” feature which allows you to add custom passphrases to your recovery phrase. By doing this, you will secure your recovery seed for even longer, because even if someone gets ahold of your recovery phase, you still hold your custom passphrase, thus making it impossible for the attacker to access your coins. Trezor wallet supports this feature.
- Memorize the recovery phrase using the mnemonic pegging technique. (See brain wallet.)
- If you are extra paranoid and really worried about your Bitcoin funds, then you should store your key on cold storage options such as Cryptoseel. This will keep your key engraved on steel plates.
- Put your Bitcoin recovery key into your will, or tell you most-trusted family member how to find your key in case you die. I am saying this because there have been such cases where a person dies and the inheritor has no idea how to unlock the Bitcoin funds that they have just inherited. This is dangerous territory, however, because if you have a significant amount of holdings, some people (even some trusted family members) may want to kill you to get that money. See this post.
How To Secure Your Bitcoin For Hundreds (And Thousands) Of Years
I cannot stress more that your seed key is everything when it comes to keeping your Bitcoin secure.
In order to make sure your bitcoins stay around for a long time, you need to be smart and follow these tips.
If you somehow land up in trouble following up these tips to keep Bitcoin recovery seed safe, then you have done something wrong. Always make sure that you’re being smart and not putting yourself in a vulnerable position.
If you don’t understand what I’m saying in this post, ask someone who does before you do anything. Follow this advice at your own risk. Ultimately, you are the only one responsible for your Bitcoin holdings.
That said, I hope these insights will help you in securing your cryptos for ages!
What techniques or tools are you using to keep your cryptocurrencies safe? What other tips can you add to this list? Let me hear your thoughts in the comments below!
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