April 30, 2023

What Is a Seed Phrase: Everything You Need to Know

What Is a Seed Phrase: Everything You Need to Know

Introducing The Most Important Layer of Crypto Security

If you’re using a non-custodial crypto wallet, there’s nothing more worrying than potentially losing access to it. If you don’t take the proper security measures, you could end up losing your crypto forever—what a nightmare!

A seed phrase, also known as a crypto recovery phrase, is the saving grace when it comes to lost phones, broken hard drives, or forgotten passwords.

In this article, we’ll uncover how to ensure you’ll always have access to your crypto.

What Is a Seed Phrase?

A crypto seed phrase is a collection of 12-24 randomly generated words given to a user upon the creation of a newwallet. It is recognized as the last resort for getting access to your crypto.

If you’re ever in a situation where you can’t access your funds, usually due to loss or damage, the seed phrase is how you reestablish ownership of cryptocurrency.

So, how does it work?

Using encryption, your wallet provider turns your private key into a seed phrase. Essentially, each word in thephrase matches a snippet of the code that forms your private key.

When you do have to go into recovery mode, it’s essential your seed phrase is entered in the correct order. If itisn’t, it won’t work, and you won’t be able to recover your crypto.

Seed Phrase vs. Private Key

Sometimes, people use seed phrases and private keys interchangeably. However, they are very different.

The seed phrase is used to protect the private key. To create a seed phrase, your wallet provider encrypts theprivate key and provides it to you in the form of a group of words.

If there were no recovery phrase, it would be easier for people to get access to your private keys, copy them, make aduplicate of your wallet, and drain all the funds inside.

Crypto Seed Phrase Storage: Dos & Don’ts

OK, we’ve established how incredibly crucial a seed phrase is to your crypto security. Now, you need to knowhow to keep your seed phrase safe.

Many people make the mistake of keeping their crypto recovery phrase close at hand—often, on the same device as their wallet.

While this may be incredibly convenient for you, it’s also rather handy for hackers or other malicious actors.

Do not keep your seed phrase online, and definitely don’t do something silly like put it in notes on your phone or have it asyour lock screen.

Yes, it’s your last resort to get into your crypto wallet, but it’s also the first port of call for anyone trying to get inwithout your permission.

Here are a few seed phrase storage top tips:

Keep it offline: You can write the seed phrase down on paper, print it out, engrave it on something, or do whatever you like. Just make sure it’s offline.

Put it somewhere safe: If you’re going to keep a copy of your seed phrase, be sure to put it somewhere you willremember—a place that no one else knows or has access to, such as a safe.

Make multiple backups: This is your last chance to get your crypto back, so multiple backups are a must. While you think one is enough, you’ll run into trouble if you keep it at home, and a house fire ruins everything.

Use more than one location: Don’t put all your eggs in one basket. As with the example above, it’s easy for you to lose access to one location. It’s suggested to keep copies of your seed phrase in multiple safe places.

How to Recover Crypto

If you’re using a self-custody crypto wallet and you’ve lost access, the only way to recover it is via your seed phrase.

So, if you’ve reached your last resort and have to use your seed phrase to recover your crypto, you’ll need to open an app or website for your wallet provider.

From there, follow the instructions to recover your wallet using the seed phrase.

Alternatively, if it’s a hardware wallet when plugged into your PC, follow the prompts to recover your crypto.

Your Seed Phrase Is Compromised: What Do You Do?

You don’t want anyone else to have access to your seed phrase. If they do, they’ll be able to recover your wallet on another device.

If you think yours has been compromised, you must act fast. Open a new wallet as soon as possible, and immediately transfer your crypto assets from the compromised wallet to the new one.

Once you’ve done this, be sure to go through the same security protocol as you did earlier to keep your new seed phrase safe.

In Summary

A crypto wallet seed phrase is the most important layer of security. You can lose your password and private key and still maintain access to your wallet. However, if your seed phrase goes missing, you’re stranded.

It’s crucial to take appropriate steps to guarantee nobody else has access to the recovery phrase, and it’s just asimportant to ensure you always have a copy of it secured safely.

If you don’t do the preparation, you’ll never find yourself in the horrible position of having a wallet full of crypto thatyou will ever be able to access. It will just remain sitting on the blockchain of no use to anyone.

For the most secure crypto wallets, check out Escrypto. They offer institutional-grade storage to every level of investor.

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