Under the mattress, in the seams of luggage, or even rolled up in a cigarette, what are the best and worst ways to keep a seed phrase safe? The key to unlock and recover cryptocurrencies, a seed phrase, must be secured and safe.
Especially now that prices are low and the crypto tourists have left, it might be time for a spring cleaning of cryptocurrency security. Security begins with a seed phrase, sometimes called a recovery phrase.
There is no denying it: Bitcoin and the cryptocurrency space in general are in the grip of a bear market. Since Do Kwon’s Terra experiment fizzled out, a cryptocurrency contagion has drowned out the most reputable exchanges, causing many self-sovereignty advocates to chant “not your keys, not your coins.”
In fact, hardly a day goes by without another “trusted” crypto lender freezing customer withdrawals. From Singapore’s crypto lender Vauld to Thailand’s 200,000-client crypto exchange Zipmex to world-renowned exchange Celsius, many centralized lending platforms have suffered similar fates, ensuring harrowing consequences for customers in 2022.
These circumstances are timely reminders to take care of your keys and make sure they are in a safe place. So while prices are down and trust in centralized exchanges (places that claim to look after crypto) is also bottoming out, there is no better time to increase the security of crypto assets themselves.
Seed phrases save lives
A seed phrase, sometimes called a private key, is a list of 12 or 24 words that make up a mnemonic phrase. Metaphorically speaking, a hardware wallet, or cold wallet, contains these keys providing a convenient way to send, or “sign” funds.
If taken care of well, a mnemonic phrase can save lives, as Alex Gladstein, a human rights activist and chief strategist at the Human Rights Foundation, often asserts. For example, if a thief steals a hardware wallet, but not the seed phrase, it is not a critical problem: 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 crypto funds.
Bitcoin skeptic Peter Schiff once got his seed phrase wrong, mistaking it for his pin code. That is the first mistake to avoid. Now, here are other examples of where not to save a seed phrase.
open secrets
The pair in possession of Bitfinex’s billions of Bitcoin, who stored their seed phrase in their cloud storage account, take home the top prize. As Cointelegraph reported, cybercriminals Heather Morgan and her husband, Ilya Lichtenstein, a cybersecurity specialist, stored her seed phrase in a cloud storage account. Thus, the FBI only had to crack his iCloud password to access more than $4 billion in BTC at the time of the report. The lesson here is that you should not store your seed phrase on the Internet. That means your Evernote notes, in an email draft, or even in a low-engagement tweet:
Some of the posts get so little engagement. It’s the best place to store my seed phrase.
Sun. Match. Hope. Air. Rocket. Clock. Finger. Matt. Bath. Grass. Lights. Congress.
— Karma is hibernating (@Karma_Zeus) July 17, 2022
Some of the posts have such little reach. It is the best place to store my seed phrase.
Similarly, as Cointelegraph reported, a seed phrase should never be typed into a phone. Why? Because, as one Redditor found out, the smartphone’s text prediction could actually guess a seed phrase. Text prediction, while sometimes useful for tricky spelling or emojis, backfires when it comes to protecting personal assets.
Although it seems adequate, a refrigerator is also not the ideal place for the “cold” storage of cryptocurrencies. A Bitcoin enthusiast answered: “Refrigerator”, to the question “what is the strangest place to store a seed phrase?”, without explaining whether the seed phrase should be stored in or on top of the refrigerator. It turns out that one non-fungible token (NFT) aficionado had already stored a seed phrase in the fridge:
Best way to store seed phrase https://t.co/9k0nHFNjeK pic.twitter.com/MpcRvwGc2m
— LazyTec (@LazyTec) July 15, 2022
Cointelegraph editor-in-chief Kristina Lucrezia Cornèr suggests that the worst place to store a seed phrase is in bad memory. Indeed, unlike the dates of historical battles, car keys, or the names of acquaintances from passages in life, a seed phrase must be wholeheartedly committed to memory.
I guess the one that I don’t remember
— Kristina Lucrezia Cornèr (@KristinaLCorner) July 21, 2022
I guess the one I don’t remember
Among the most creative and at the same time most memoristic methods is that of memorize “pages, lines and words of favorite books”, what for a Bitcoiner it means store the seed sentence on pages 100 to 112 of a Harry Potter text. Which of the eight or more Harry Potter books is anyone’s guess. Fortunately, there are now clever ways to memorize a seed phrase. MTC, a Bitcoin educator who came up with the Sats Leger savings device, came up with a way to memorize a seed phrase in just 10 seconds using patterns.
play it safe
But what do the experts have to say about seed phrases? Chris Brooks, founder of cryptocurrency recovery business Crypto Asset Recovery, told Cointelegraph that in his experience, human error can eradicate wealth. People should be more concerned about leaving their seed phrase or private keys in paper wallets that can be dumped by mistake than by hackers or scammers. Brooks explained:
“You have a much higher chance of moving into a new apartment and losing your crypto password in the process than of getting hacked.”
The Brooks family behind Crypto Asset Recovery operated a “seasonal business” as in every bull market, such as in 2017 and 2021, crypto crackers are called in by crypto enthusiasts who have forgotten their passwords or lost their seed phrases. At one point in 2021, they told Cointelegraph that they had up to 150 customer calls in a day. His big tip for managing seed phrases is to keep it simple:
“So, in general, our security tips are pretty basic. Get a $30 safe from Amazon or, you know, build a small wooden box that’s easily identifiable as a place for secure documents and just keep your phrases.” of seeds there”.
They suggest putting anything important in that box. That way, when “you spring clean or move house, you’re not going to throw it away. You’re not going to shred the paper or something.”
However, when it comes to cryptocurrencies, those of the physical persuasion may be more inspired to store their seed phrases in some even more creative storage “boxes.” Bitcoin advocate onthebrinkie 3D printed an adult toy suitable for an OpenDime (such as a USB key for Bitcoin) or a seed phrase to be hidden. The inspiring idea is that if an intruder breaks in, he could steal the wooden box full of important documents, but no one in their right mind would steal a sex toy.
Clarification: The information and/or opinions expressed in this article do not necessarily represent the views or editorial line of Cointelegraph. The information set forth herein should not be taken as financial advice or investment recommendation. All investment and commercial movement involve risks and it is the responsibility of each person to do their due research before making an investment decision.