To ensure the cryptocurrency you store in any self-custodial wallet remains safe and secure, it is of utmost importance that you store your seed phrase securely. The seed phrase allows one to cryptographically derive all the private keys needed to spend cryptocurrency balances in your wallet so if a malicious actor, whether a hacker, or in some cases even a family member/friend gets a hold of it when you don't want them to, it allows that part to take or steal the cryptocurrency.
There is no single correct way to store your seed phrase, but there are do's, don'ts, and aspects consider.
DO:
- Store your seed phrase either on a physical piece of paper or even consider storing on steel.
- Keep this copy of your seed phrase in a secure physical location that another party won't readily find
- Access your wallet through your local installation or device when you can. The seed phrase is only meant to be a backup, not the primary way you access your wallet
- Write down your seed phrase legibly, and double-check to make sure you have each word spelled correctly, and in the correct order
DON'T:
- Take a photo of your seed phrase
- Email yourself the seed phrase
- Write down the seed phrase in a note/word file on your computer or phone
- Store your seed phrase on cloud storage, in any form
- Share your seed phrase with others, for any reason
- Input your seed phrase into any electronic device
- Input your seed phrase into an application, website or webform simply because it asks for it, especially if you get a message saying your wallet is at risk or if the message announces there is allegedly a security issue; there is a good chance this is a phishing attempt designed to make you act quickly and without appropriate caution, in an effort to steal your cryptocurrency
CONSIDER:
- Whether or not to implement a passphrase to your seedphrase (essentially a 13th or 25th word), or even multiple passphrases.
- Whether or not to store a second copy of your seed phrase in another physical location as a redundancy measure e.g. parents' house.
- Consider carefully how to ensure your family can access your seed phrase and/or wallets safely in the event of sudden death (i.e. inheritance) or serious injury that would otherwise leave you unable to provide your family the credentials
At some level, there is a tradeoff between security and redundancy. The more locations your seed phrase is stored or the more people that could potentially have access to it, the more likely it is that your funds will never be rendered inaccessible forever but by doing so, users run increased risks of their funds being stolen or accessed without their consent, typically by a hacker or thief unknown to the victim, but in rare cases a family member or friend.
