A seed phrase or a private key, is a list of 12 or 24 words forming mnemonic phrases. In a nutshell, a hardware wallet, or cold wallet, contains these keys making ways of sending, or “signing” funds convenient.
A seed phrase can save lives if stored properly, as Alex Gladstein, a human rights activist and chief strategy officer at the Human Rights Foundation, often says. If a burglar steals a hardware wallet but not the seed phrase, it’s no critical issue because the seed phrase can be used with a new wallet. The 12 or 24 words can also be used anywhere in the world to access Bitcoin (BTC) or crypto funds, you are forced to flee by a government or a bad actor
Here are some other examples of where not to store a seed phrase.
Cybercriminals Heather Morgan and her cybersecurity specialist husband, Ilya Lichtenstein, stored their seed phrase on a cloud storage account, as reported by Cointelegraph. It only took minutes for the FBI to crack open their iCloud password, gaining access to over $4 billion in bitcoin. The take home note was not to store your seed phrase on the internet. That means your Evernote notes or in a draft email.
Similarly, a seed phrase should never be typed into a phone. This is because smartphone text prediction could actually guess a seed phrase. Even though text prediction is useful sometimes for tricky spelling or emojis, it is counterproductive when it comes to protecting personal wealth.
Bad memory is the worst possible place to store a seed phrase said Cointelegraph’s editor-in-chief, Kristina Lucrezia Cornèr. A seed phrase should be engraved to memory wholeheartedly, likewise car keys, historic battles dates or friends’ names from all stages of life.
It is now fortunate to have easy ways in memorizing a seed phrase. MTC, a Bitcoin educator who came up with the Sats Leger savings device, developed a way to memorize a seed phrase in just 10 seconds through patterns.
Playing it safe
According to Chris Brooks, founder of cryptocurrency recovery business Crypto Asset Recovery, human error can wipe out wealth. There is a higher tendency of people throwing out their seed phase in paper wallets rather than getting hacked or scammed. Brooks explained:
“You have a far greater chance of moving to a new apartment and losing your crypto password in the process than you do of getting hacked.”
“So, generally speaking, our security tips are pretty basic. Get a $30 safe off Amazon or, you know, build a little wooden box that’s easily identifiable as a place for secure documents and just store your seed phrases there.”
They suggest putting anything important into that box. That way, whenever “you’re doing spring cleaning or when you’re moving houses, you’re not going to throw it out. You’re not going to shred the paper or something like that.”