When it comes to self-protecting your Bitcoin, there is one inescapable fact: the buck stops with you. You are responsible for your own money, you are responsible for maintaining it, you are responsible for everything. This can be a scary prospect, but there are ways to simply approach self-preservation.
Securing your Bitcoin can be considered similar to building a house. First, you have to lay the foundation, then build a frame on top of it, and from there you fill in the walls, insulation, utilities, etc. For each piece of the house you want to add, you must have completed the previous piece correctly otherwise the entire house will be unsafe and unstable.
When it comes to Bitcoin security, your seed phrase is the foundation of your security. It is both the most important and the weakest point in security. Just as a house's foundation affects its stability, the initial statement affects the security of your portfolio.
So how do you securely store a seed phrase? Here are some key considerations to keep in mind when figuring out how to secure your seed phrase.
Sharing is bad
Your seed phrase is your money. Every private key required to allow spending, every address and every Bitcoin account in your wallet: all of these parts are generated from your seed phrase. Anyone with access to your seed phrase can access any funds stored in that wallet. Therefore, creating and securing a backup of this seed gateway is essential.
If something happens to your hardware wallet, or the device you installed your software wallet on, your only recourse is to backup the seed phrase. If you miss this initial phrase, you will lose your money. Your funds can be accessed in two ways when you hold your funds yourself, either with the wallet you use, or the primary gateway backup. Your Bitcoin wallet protects a copy of your private keys on that device, but it cannot help you protect the seed phrase backup.
no one You must have access to your seed statement; Although it seems cold and cruel, you can't be sure that they will handle it responsibly. They can still misplace a copy of your seed phrase, or leave it lying around unsecured, without any malicious intent on their part.
So the first rule: Never share your seed phrase with anyone. Any exception to this rule under any circumstances should be carefully considered before breaking it. After all, being overconfident could put your Bitcoin at risk.
Computers are not your friend
It is very important to avoid recording the seed phrase in any digital format. Computers are incredibly complex machines and are therefore vulnerable to a series of security issues. People's devices are hacked on a regular basis. Copies of the seed phrase can be compromised when stored digitally. In short, your laptop or smartphone is vulnerable to malware and spyware. If a hacker gains access to your device, they may be able to read your files and extract the seed phrase from any type of digital storage they have access to. For this reason, you should avoid storing the seed phrase digitally.
This is especially true when storing anything in a remote digital service, such as a cloud storage provider. If your email account is compromised, the hacker can use your credentials to log in to any cloud storage service and access your seed phrase.
In no case should you:
- Store your seed phrase on a cloud storage location like iCloud or Google Drive
- Take pictures of it with your phone or other digital camera
- Send it via any digital means, such as email or text
- Enter it into anything except the Bitcoin wallet you're using
- Handle it in front of any camera
- Say it out loud near the microphone
The only copy of the seed phrase must be physical and completely isolated from the Internet.
This is why it is also not recommended to keep large amounts of Bitcoin in a software wallet on your computer or mobile phone. Quite simply, your devices connected to the Internet are vulnerable to hacking. Therefore, if you want to keep your Bitcoin safe, you should invest in a hardware wallet.
Use solid backups of seed statements
One important decision must come to mind when it comes to backing up your seed phrase: what to write it on? This may seem like a silly question if you're new to the industry, but unless you stop using Bitcoin, you'll need to secure your seed phrase for the rest of your life.
Durability is incredibly important. You can just write the initial phrase on a piece of paper and put it in a drawer, but how long will that be safe? Paper is flammable: it decomposes. If you spill water on it, the ink may bleed and the backup may become unreadable. Paper is not suitable for long-term storage.
Metal is a much better option, and many products on the market are designed to store the initial phrase on metal. Some solutions use small individual metal tiles with letters on them, which you can insert into a frame and hold in place to record your words like a BillFodl.
Metal tile backups can be reused, so over time, if you create new wallets and move to them, the same backup set can be reused for the new tile. It is also possible to easily “destroy” your backup if necessary by removing tiles. If you move somewhere and you can't take your backups with you due to the risk of someone else finding them, for example going through an airport, you may not want to leave your backup intact.
Other metal backups use engraving tools to scratch or imprint words directly onto a flat metal surface, providing stronger protection against threats such as fire. This is very safe, but destroying a copy of the original phrase engraved on metal is very difficult. To really make sure it's destroyed, you have to grind down the entire face of the metal plate until no trace of the words remains.
Finally, there are capsule-based solutions. These use small steel tiles with letters on them, but instead of being placed in a flat frame, they are loaded into a steel tube around a bar to hold them in place. This can provide reuse benefits while ensuring that no fire warps scatter and dislodge the letter boxes.
When choosing between metal tiles or steel panels, carefully weigh the pros and cons of both. But remember: use something metal. Don't trust your Bitcoin on a flimsy piece of paper.
Physical safety
Now that we know how to store the seed phrase, where should you store it? Keeping your initial statement on a sturdy piece of material is important, but it's also important to keep it somewhere that's physically difficult to access. It should be stored somewhere you can keep it locked, such as a safe or safety deposit box. A safe is better than a lockbox, because it is larger and more difficult to physically carry. A wall-mounted safe is even better, as it requires destroying the wall to remove the safe.
If you don't have a safe or safety deposit box, keep the initial ferry out of sight. Place it in a file cabinet or desk drawer in a room where others cannot access it. The important part is making sure that wherever it is, no one else can access it.
Split your backup
You may not have a single place that can be securely secured to house your backup primary ferry. There are two options that allow you to keep a secure backup without keeping the raw statement in one place. If you're considering partitioning your primary statement backup, follow a known protocol or don't do it at all.
Partition your backup yourself
Seed XOR is one of the mechanisms. It is a process that allows you to take a pre-existing prime expression and break it down using a mathematical operation into (or more) new prime expressions. These new metaphrases are completely valid and can later be recombined to regenerate the original metaphrases from which they were created. This allows you to break the seed phrase into parts and store them in multiple locations. that it very It is important to keep in mind that you must have 100% of the split seed phrases, if you lose one you will not be able to recreate the original seed phrase. A big advantage of XORing is that you can do it manually.
Shamir's secret sharing
The second is Shamir's secret involvement. Similar to XORing SSS, it splits the initial statement into multiple parts, but uses a completely different mathematical process to do so. Unlike initial XORing, Shamir arrows allow you to recover your original phrase with less than 100% equity. It can be set up like a multisig, for example, so as long as you have 3 of 5 spare posts, you can replenish your seed phrase. The only downside is that only some wallets support using Shamir, and this cannot be done manually.
Under no circumstances should you manually split the seed phrase. If you don't follow a secure, widely audited protocol like Seed XOR or Shamir Secret Sharing, don't even think about it. Naively splitting your seed phrase into multiple parts can significantly reduce the security of your Bitcoin. Guessing 12 or 24 words at random and guessing someone's first phrase is statistically impossible, but if someone has 4 of those words? Or 6 of those words? It is already practical to guess the rest of the initial statement.
Another alternative, if you use a ledger, is a ledger retrieval service. This optional paid service uses a form of Shamir's secret sharing called Pedersen Verifiable Secret Sharing (PVSS). This allows you to back up access to your wallet without a seed phrase after going through the identity verification process with your government ID.
Social recovery
If you are in a situation where you do not have a secure place to store backup copies of raw statements, there are workarounds. Wallets and services like Unchained, Casa, and Nunchuck Wallet provide multi-signature solutions where a third party can hold one of your keys for you. For example, if you have 2 of 3 multisig, they can hold one key. This ensures that as long as you don't lose both keys that you hold yourself, they can help you move your funds to a new wallet.
Keep it secret, keep it safe
Ultimately, securing your Bitcoin is your responsibility. It's something you have to take seriously and make the right effort to maintain, no one is going to come and save you if you don't take it seriously. As Gandalf warned Bilbo in The Lord of the Rings, “Keep it secret, keep it safe.”
This is your job as a Bitcoin user, to keep your seed phrase hidden from others and safe from those who want to take it from you. The simple advice in this article is the vast majority of what you need to do to achieve this.
Don't try to reinvent the wheel. Simply record your seed phrase on a sturdy medium such as metal, keeping it physically safe from prying eyes and thieving hands. Keep it locked in your closet or in a room that other people don't access frequently. Check it from time to time. That's all you have to do.
Don't overcomplicate things in your head, just keep things simple and your Bitcoin will be safe.
