Get the weekly summary of crypto market analysis, news, and forecasts! This Week’s Summary The crypto market ends the week at a total market capitalization of $2,17 trillion. Bitcoin continues to trade at around $62,300. Ethereum experiences no changes and stagnates at around $2,400. XRP is down by 2%, Solana by 1%, and Dogecoin by 3%. Almost all altcoins are trading in the red, with very few exceptions. The DeFi sector decreased the total value of protocols (TVL) to around…
Best Ways to Store Your Mnemonic Passphrase and How
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What is the best way for any crypto trader to store their crypto assets? Well, the simple answer is a secure cryptocurrency wallet. The question arises from the fact that exchange platforms are a complete no for asset storage, but the wallets have technologies to help protect the coin for ages.
However, the recovery seed, a passphrase, is among the necessities of setting up a wallet. In many cases, the phrase is between 12 and 24 random words, making the phrase complex to recall. Therefore a good investor knows that they have to put the phrase in a document for future reference. So what is the best way of storing the recovery seed (mnemonic passphrase)? Keep reading to find out.
Use the Principle of Paper Wallet
Leveraging paper wallets is probably the best way of protecting your passwords. Primarily it involves writing down your phrase on a piece of paper.
Paper and pen have for ages been the best method to pass down information. Paper and pen use dates back to ancient Egypt and other countries like Greece, Spain, etc.
Over the years, archaeologists have discovered some pieces of paper with essential details from ages ago that are still readable. Paper stores are, therefore, the best way of storing your mnemonic passphrases.
Unlike other machines or hard drives that break after a few years, paper is best since it will probably store the data for a lifetime and even longer when needed.
Split the Passphrase into Two
One more thing that will bolster your passphrase’s safety is splitting the passphrase into small portions with fewer elements. The new shorter phrases are written on different papers and stored in different positions.
The principle of dividing the passphrase does not necessarily mean splitting it into just two parts. Depending on your need for security, you can split the passphrase into more than two parts.
Splitting the passphrase reduces the chances of unwarranted parties accessing the full passphrase. For example, a person mistakenly or knowingly gets access to part of the recovery phrase and cannot use it without the other parts.
A point to note when doing this is you need to number the pieces according to their sequence. The wrong sequence means you will not get access to your assets.
Have Two or More Papers
Having just one piece of paper is risky since you’ll lose the coins if you lose the paper. As such, it’s essential to create a paper wallet to have more than one set of papers for the phrase.
After getting two or three papers, position them at different places in your house, and make sure you will remember them easily.
For a person with large amounts of coins, the user could laminate the paper to make them waterproof. Additionally, others choose to have vaults that cannot be damaged by fire or water in their home to ensure that their assets are safe in a natural disaster.
Adequate protection of the paper, whether stored at home or elsewhere, will help protect your coins for a very long time.
Avoid Digital Copies
You should avoid having any digital copies of the phrase. Do not write the passphrase on a word, excel, or any other form of google or digital document.
Additionally, please do not take a photo of the phrase. Finally, never store the document on email or any cloud service.
Any digital or online copy of the document and recovery phase is easy to hack or duplicate. Criminals will take advantage of such documents and will steal your coins.
Advanced Recovery Phrase
Another vital thing to protect your recovery phrase is to leverage the advanced recovery phrase feature available in a limited number of wallets. The feature allows you to use custom passphrases as your recovery phrase.
A custom passphrase will help protect your recovery phrase since even when attackers get the recovery phrase, you will still have the custom passphrase. Holding the custom passphrase ultimately hinders criminals from stealing your coins.
To use the custom passphrase feature, you need to find a wallet capable of that, like the Trezor wallet.
Memorize the Passphrase
To adequately memorize the passphrase, you can leverage the mnemonic pegging technique, which involves particular rhyming numbers to pegging words.
Use the Cold Key Storage
If you are paranoid about using the paper wallet, you can use the cryptosteel option, which engraves the key on steel plates.
Add it to Your Will
The passphrase should be part of your will so that your BTC fund can be passed down in case of your death. After death, some families feud for wealth, select the most trusted member and inform them where the key is.
Final Word
The increasing risks in phishing, hacking and other criminal activities leave investors and wallet holders with a dire need for better ways to protect their wallet addresses. The use of recovery phrases is one of the ways to bolster the security of the initial phase. As such, the recovery phrase is primarily working similarly to 2nd-factor authentication.
However, this phrase also needs to be safeguarded to reduce the risks of criminals accessing the investors’ wallets. As such, this write-up states six ways an investor can protect their recovery phrase.
Btc
Bitcoin
$62.547
price
price
0.84959%
price change
One vital thing to note is to avoid online or digital copies of the phrase instead of using rigid forms like paper. Moreover, you can leverage the advanced recovery phrase technique and memorize the passphrase.
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Adam Robertson
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