The worst places to keep your crypto wallet seed phrase

0
0

Under the mattress, in the seams of a piece of luggage, or even rolled into a cigar, what are the worst and best ways to keep a seed phrase safe? The key to unlocking and recovering cryptocurrency, a seed phrase, must be secured and safe.

Especially now that prices are low and crypto tourists have checked out, it might be time for a crypto security spring cleaning. Security starts with a seed phrase, also known as a recovery phrase.

There’s no denying it: Bitcoin and the crypto space written big are in the clutches of a bear market. Since Do Kwon’s Terra experiment went up in smoke, a crypto contagion has choked the most reputable exchanges, causing many proponents of self-sovereignty to chant “not your keys, not your coins.”

Indeed, hardly a day goes by when another “trusted” cryptocurrency lender freezes client withdrawals. From Singaporean cryptocurrency lender Vauld to the 200,000-customer Thai crypto exchange Zipmex to the world-famous Celsius exchange, many centralized lending platforms have suffered a similar fate, with heartbreaking consequences for customers in 2022.

These circumstances are a timely reminder to take care of your own keys and keep them in a safe place. So while prices are low and trust in centralized exchanges (places that claim to care for crypto) is also bottoming out, there’s no better time to boost the security of one’s crypto assets.

Seed Sentences Save Lives

A seed phrase, also known as a private key, is a list of 12 or 24 words that make up a mnemonic. Metaphorically speaking, a hardware wallet, or cold wallet, contains these keys that provide a convenient way to send or “sign” money.

When properly cared for, a seed phrase can save lives, as Alex Gladstein, a human rights activist and chief strategy officer at the Human Rights Foundation, often argues. For example, if a burglar steals a hardware wallet but not the seed phrase, it’s not a critical issue – the seed phrase can be used with a new wallet. If a government or bad actor forces you to flee, the 12 or 24 words can be used anywhere in the world to access Bitcoin (BTC) or cryptocurrency.

ALSO READ  Paraguay's Crypto Framework One Step Away From Becoming Law

Goldbug and Bitcoin skeptic Peter Schiff once messed up his seed phrase and mistook it for his PIN. That is the first mistake to avoid. Now, here are some other examples of where a seed phrase should not be saved.

Open Secrets

The couple who own the Bitfinex billions in Bitcoin and have their seed phrase stored on their cloud storage account win the first prize. As TBEN reported, cybercriminals Heather Morgan and her husband, cybersecurity specialist Ilya Lichtenstein, have stored their seed phrase on a cloud storage account. As such, at the time of reporting, the FBI only had to crack their iCloud password to gain access to more than $4 billion worth of BTC. The lesson here is not to store your seed phrase on the web. That means your Evernote notes, in a draft email or even in a low engagement tweet:

Likewise, as TBEN reported, one should never type a seed phrase into a phone. Why? Because, as one Redditor realized, smartphone text prediction could actually guess a seed phrase. Text prediction, while sometimes useful for tricky spelling or emojis, is counterproductive when it comes to protecting personal wealth.

ALSO READ  Web3 Dominates Venture Capital Interest in Blockchain Industry in Q2 2022

While it sounds appropriate, a refrigerator is also not the ideal place for the ‘cold’ storage of cryptocurrencies. A Bitcoin enthusiast replied, “Refrigerator”, when asked “where is the weirdest place to store a seed phrase?” without explaining whether the seed phrase should be kept inside or on top of the refrigerator. It turned out that a non-fungible token (NFT) fan already had a seed phrase stored on the fridge:

TBEN editor-in-chief Kristina Lucrezia Cornèr suggests that the worst place to store a seed phrase is in a bad memory. Indeed, unlike dates of historical battles, car keys or the names of acquaintances from passages of life, a seed phrase must be wholeheartedly committed to memory.

Among the more creative but memory exhausting methods are: remember “pages, lines and words from favorite books”, which means to a Bitcoiner: save the seed phrase on pages 100 to 112 of a Harry Potter text. Which of the eight or more Harry Potter books is a mystery. Fortunately, there are now handy ways to memorize a seed phrase. MTC, a Bitcoin educator who invented the Sats Leger savings device, came up with a way to memorize a seed phrase in just 10 seconds through patterns.

Play it safe

But what do the experts have to say about seed phrases? Chris Brooks, founder of cryptocurrency recovery company Crypto Asset Recovery, told TBEN that in his experience, human error can wipe out wealth. People should be more concerned about leaving their seed phrase or private keys in paper wallets that can be accidentally thrown away instead of hackers or scammers. Brooks explained:

“You are much more likely to move into a new apartment and lose your crypto password in the process than to get hacked.”

The Brooks family behind Crypto Asset Recovery had a “seasonal business”, as in any bull market, such as in 2017 and 2021, the crypto crackers are summoned by crypto enthusiasts who have forgotten their passwords or lost their seed phrases . At one point in 2021, they told TBEN they had up to 150 customer calls per day. Their one big piece of advice for managing seed phrases is to keep it simple:

“So in general, our security tips are pretty simple. Buy a $30 safe from Amazon or, you know, build a little wooden box that’s easily recognizable as a place for secure documents and just store your seed phrases there.”

They suggest putting everything important in that box. That way you don’t throw it away when you do spring cleaning or when you move. You’re not going to shred the paper or anything like that.”

ALSO READ  Gemini Receives Virtual Asset Service Provider License in Ireland

Related: NFT, DeFi & Crypto Hacks Galore – Here’s How To Double Your Wallet’s Security

However, since it is crypto, those with a physical persuasion may be more inspired to store their seed phrases in even more creative storage boxes. Bitcoin advocate, onthebrinkie 3D has printed an adult toy suitable for an OpenDime (like a USB key for Bitcoin) or a seed phrase to hide. The inspiring idea is that if an intruder breaks in, they might steal the wooden box full of important documents, but no one in their right mind would steal a sex toy.