Ask anyone in the cryptocurrency industry what the most important part of owning crypto is and they’ll answer: owning your own private key. Without it, your coins simply just aren’t yours. Owning your private keys gives you much more power and control over your cryptocurrency, but it also comes with the responsibility of ensuring that it’s secure. And there’s nothing more important to keep safe than your recovery phrase!
WHAT IS A RECOVERY PHRASE?
A recovery phrase, or seed phrase, is the 24 words generated by your hardware wallet during the initial setup process. It is used to encrypt your private key into an easier to understand format (i.e. instead of a string of letters and numbers) which can then be used to identify, authenticate, and grant you access to the cryptocurrency in your wallet.
WHY IS IT SO IMPORTANT TO KEEP IT SAFE?
As we just mentioned, your 24-word recovery phrase is used to access the cryptocurrency in your wallet. Therefore, anyone who knows your recovery phrase can access your wallet and funds. It’s vital that you keep it private and secure.
If your hardware wallet breaks, is stolen, or misplaced, your 24-word recovery phrase can be used to restore it. But if your recovery phrase is stolen or misplaced, there is no bank or institution to back you up or give you a replacement. And because of the secure nature and random mathematical sequences used to generate the private key, there’s no way you or anyone else can recover it, so you will lose access to your cryptocurrency.
HOW DO I KEEP IT SAFE?
Now this is the important part! When you set up your hardware wallet, you are asked to take note of the recovery phrase. Of course you could simply write down your recovery phrase on a piece of paper, but this isn’t the most durable option. Paper can easily be destroyed or misplaced. Just ask Clifton Collins from Dublin, who lost access to 6,000 Bitcoins after his cleaner chucked out scraps of paper that, unbeknownst to her, stored his recovery phrase!
There’s also a few other things we recommend you DON’T do:
- Store your recovery phrase online, where it can be easily hackable
- Take a screenshot or mobile photo of your recover phrase because someone can simply hack into your computer/mobile and copy it
- Store it on email or cloud services
- Rely on your memory alone to remember your recovery phrase
By now you may be asking, well what CAN I do with my recovery phrase?
There are companies such as Billfodl, who have created recovery phrase devices. This option is much more permanent, solid, and dependable. The Billfodl is constructed of 316 stainless steel, with a melting point of almost 1400 degrees celsius. It can withstand more than double the temperature of an average house fire and it’s impervious to any type of electrical hazard. Using a randomised set of character tiles, you simply recreate your recovery phrase in the steel unit, creating an almost indestructible back up.
Remember, your assets are safe if your 24-word recovery phrase is!