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For those just getting into the cryptocurrency game, the prospect of keeping your Bitcoin funds secure and protected can be slightly daunting. Luckily, there are many user-friendly Bitcoin wallets and each features a nifty back-up feature that instantly allows you to recover your Bitcoin funds should your wallet device ever get misplaced or lost. This feature, known as a "seed phrase", seed recovery phrase or recovery seed, is a unique sequence of words that your wallet or hardware signing device generates. This sequence of words acts as a password for all of your Bitcoin on that wallet, and allows you to recover your funds if your wallet fails. While it can be easy to set aside your seed phrase for later, it's best to be proactive to ensure it's protected. Taking extra precautions with your seed phrase is essential when it comes to protecting your bitcoin. Make sure to store it in a secure location where it won't be destroyed or lost, and keep it protected from hackers and thieves. Your seed phrase is essentially the key to your funds, so treat it with the utmost care. This article will walk through all the nitty-gritty tips so you avoid making a common mistake. In this article, I’ll give you: A list of the major Bitcoin wallets you can use to store your Bitcoin A comprehensive overview of the many methods you can use to store your recovery seed The various pros and cons of each Tips you can use to maximize your recovery seed's overall security How to store your recovery seed securely How to pass on your Bitcoin in the event of your death Once you're done reading, you should be well on your way to storing your seed phrase using the most safe and reliable means available, ensuring the utmost protection of your Bitcoin funds no matter what happens to you and your digital devices in the future. To start with, we'll give a quick overview of hardware wallets and what exactly a recovery phrase is. Your subscription could not be saved. Please try again. Your subscription has been successful. I make money simple, so you can save more of it. Sign up to come down the rabbit hole with me. Provide your email address to subscribe. For e.g abc@xyz.com SUBSCRIBE What Bitcoin wallets are available? Below you'll find a list of a few of the most popular wallets available today. Software wallets run on your phone or computer, while hardware wallets are dedicated pieces of hardware (like a specialized flash drive) that allow easy and secure access to your Bitcoin with strong security. For an in-depth review of the most popular hardware wallets for Bitcoin, click here. HardwareSoftware (on your phone)TrezorMuunLedgerWallet of SatoshiColdCardBluewallet Each of these wallets will give you a seed phrase consisting of 24 words, which will allow you to access all of the bitcoin addresses associated with your wallet - and therefore all your funds. BONUS: Pick up a 3D printed hardware wallet mount from my friends over at CryptoCloaks to tuck your wallet away somewhere safe. Source: CryptoCloaks What is a 24 word Mnemonic Recovery or Seed Phrase? In the simplest terms, a seed phrase is a sequence of specific words that house all the information necessary in order to fully recover your Bitcoin funds. Whichever wallet you choose to use will generate a unique recovery seed specifically for you, and that software will go on to instruct you to store the recovery seed in some way where it will be accessible in case of emergencies. The seed phrase will be unique and typically feature 24 words, some of which may repeat. Before you store your recovery seed, read our tips section! Seed phrases are based on open source specifications compatible with the Bitcoin protocol through Bitcoin Improvement Protocol 39, or BIP-39. This means as long as you have your seed phrase, you can use any wallet that implements this open standard to manage your bitcoin. Say you own a Trezor today, but in 10 years your device breaks and Trezor is out of business - you can just buy a different hardware wallet or download a wallet to your phone and use your seed phrase to regain access to your bitcoin. However, this also means if a thief gets hold of your seed and imports it into a device they control, you could lose your bitcoin. That makes your seed phrase as valuable as a bar of gold. This is why properly storing your seed phrase is so critical - you must balance easy recovery for you with security against theft and hacking. However, since your seed phrase is just a series of 24 words, it can be recorded and stored in much more sophisticated ways (and for a fraction of the cost!) than a bar of gold - making it potentially far more secure. The primary purpose of a seed phrase is to have some kind of physical means to recover your Bitcoin funds should your wallet fail you. This includes if your computer crashes, your hard drive becomes corrupted, you lose your phone, or you smash your hardware wallet - any case where your wallet becomes inaccessible. How Does a Seed Phrase Work? Seed phrases work similarly to any other form of code, with each word representing a numerical value that is understood by the wallet. The phrases are generated randomly based on a predetermined database of words. One advantage inherent to the nature of seed phrases is that they use actual recognizable words in the English language that can be deduced and remembered regardless of small errors as a result of negligent handwriting. This is in contrast to many other randomly-generated passwords where each key must be clearly legible in order for the password to be properly recreated, as they are simply a sequence of random characters. Seed phrases, therefore, have both the advantages of randomization and the advantages of readily-recognizable and common words. Why Can’t a Seed Phrase be Guessed by Someone? You would think a string of 24 words would be pretty easy for someone to guess, or that it would be profitable for someone to make a computer cycle through possible combinations until it found a wallet that contained some bitcoin they could steal. However, the number of possible wallets is mind-boggling. Consider this: The words used in a recovery seed phrase come from a list of 2048 words - so a 24-word seed for a Bitcoin wallet has 2048^24 combinations, or 2^264 or 16^66. That's far more than the estimated 10^21 stars in the universe and about three times the 10^80 number of atoms in the universe. Even if every human on Earth today had 1,000,000 wallets (within which are millions of addresses), that would only amount to 7,800,000,000,000,000 wallets - which is around 2^53. This sounds like about half of the possible combinations, but it's not: exponential growth means it's far smaller than it looks. If everyone in the world had 1,000,000 bitcoin wallets, we would still only utilize 0.000000000000000000000001654% of all the possible wallets. Finding a single wallet within those million wallets per person by guessing 24 random words is vastly more difficult than finding one specific grain of sand among all the sand on Earth. Even finding a specific grain of sand on this beach would be a walk in the park versus guessing any random seed phrase. Source So it’s pretty safe to say nobody is guessing bitcoin wallets any time soon. It would take an army of computers eons just to find one wallet with funds in that space. How To Store a Recovery Seed How you record and store your recovery seed is incredibly important given the vast amount of power that those who possess it will have over your Bitcoin funds. As well, since the point of a seed phrase is to be readily available where and when you happen to need it, keeping it somewhere secure but also accessible is a must. The specific method that you use to transcribe your seed phrase is also important, regardless of how it is stored, as some transcription methods prove much more secure than others. Check out our tips section before you record your seed phrase! We recommend that you store your seed phrase physically after your software or hardware wallet delivers it to you. Physical storage leaves your seed phrase less open to hackers who could steal your recovery phrase from digital storage. However, many people will still choose some form of digital means to store their seed phrase, either as the predominant means or simply as an extra form of back-up. Let's take a look at both the physical and digital means you can use to store your seed phrase, how to go about using them, and the specific pros and cons of each. Recording Your Seed Phrase - On Paper or Digitally Writing Your Seed Phrase Down on Paper Of course, the most obvious method to bring your digital seed phrase into the physical world is the same method you would typically use to bring any other form of writing into the physical world-- pen and paper. Simply writing your seed phrase in full down on a piece of paper may be enough to provide you with the security you desire. However, there are some caveats to using pen and paper that make this most simple of methods not the most ideal for storing something as important as a seed phrase. For one thing, paper itself is easily destructible, not to mention ink. In the event of flooding or a fire, paper will be decimated, meaning your seed phrase will be decimated right along with it. Of course, this is bad news for anyone who is likely losing all of their digital hardware and equipment in the fire or flood, as well. For another thing, paper is incredibly easy to misplace. It can get blown away, mixed in with the trash, or simply confused with something else and misplaced somewhere, never to be seen again. For these reasons and more, those wishing to transcribe their seed phrase over into the physical world often go for means that are more permanent and durable than paper. Engraving or Stamping Your Seed Phrase on a Stainless Steel Back-Up Plate Stainless steel back-up plates were created so Bitcoin users would have a way to more permanently etch their seed phrases into the physical world than mere pen and paper. They are made of stainless steel, on which your seed phrase can be permanently engraved. Because the engraving is made on stainless steel, it will be able to last much longer than paper in the event of a fire or flood. The plate can be anything from a small card you can keep in your wallet to a larger piece that can be stored permanently at home or in a vault. Any size plate you choose can be purchased alongside tools for self-engraving (not always included), meaning the user doesn't have to share their seed phrase with those they purchase the plate from. Because these plates are created specifically for the purposes of holding up in a catastrophe, they typically include numerous guarantees as to their durability, holding up well against any and all elements you can throw at them, from water to fire, as well as excessive wear-and-tear. When it comes to stainless steel back-up plates, there are many manufacturers each offering their own unique spin. Let's take a look at 5 of the top stainless steel back-up plate manufacturers on the market and see how they stack up: Cryptosteel Based out of the UK, Cryptosteel offers stainless steel "Capsules" and "Cassettes", priced in euros, with the Capsule being about the size of a laser pointer and the cassette being the size of, well, a cassette. The capsule costs 74 euros and the Cassette costs 108 euros, although discounts are offered for bulk batches. Instead of requiring engraving, each Cassette or Capsule comes with a designated amount of stainless steel tiles that can be inserted in the order of your seed phrase. Price to Back Up One Seed Phrase: 74 Euros Cryptosteel Shop Blockplate Blockplate offers stainless steel back-up plates at $69 for two - each plate holding 12 words. Their version one plates, which look identical, are $49 per pair. Completely square and just a little bit smaller than a coaster, these plates allow you to store your seed phrase on a grid with nothing but a basic center punch, no letter tiles required. Price to Back Up One Seed Phrase: $49 (plus metal punch for $10, if you need it) Blockplate Shop Hodlinox Compared to Blockplate and Cryptosteel, Hodlinox offers a much more traditional option that allows you to engrave your seed phrase verbatim with an engraving pen, offering essentially a blank canvas. Card-sized, a single plate costs 29 euros, but there is a double-sided plate offering additional security for 49 euros. They also have a unique model which closes up the seed, and includes a tamper-evident seal so you know if someone has tampered with your seed or gained access. Price to Back Up One Seed Phrase: 29 Euros Hodlinox Shop Coldbit Coldbit offers heavy-duty cards with included cases at 69 euros and engraving sets for an extra 20 euros. You may also opt to engrave yourself with a tool you have at home that can engrave stainless steel, like a diamond Dremel bit. Relying on pure verbatim transcription similar to the Hodlinox plates, these plates nonetheless offer a little bit more protection and some nifty designs. Price to Back Up One Seed Phrase: 69 Euros (plus 20 euros for letter stamps, if you need them) Coldbit Shop Billfold by Privacy Pros Rebranded as Privacy Pros, the signature Billfodl is still available for $89. It utilizes a card design very similar to Cryptosteel Cassette, with small tiles you slide in place to form your seed phrase. Price to Back Up One Seed Phrase: $89 Privacy Pros Shop Encrypting Your Seed Phrase and Storing It Digitally Although it is generally recommended not to store your seed phrase digitally, those who are better versed in digital security may see this as a platitude that can be painlessly ignored. While laymen certainly shouldn't go about sending their seed phrase to and fro via email, proper digital encryption and storage through means such as a cloud or USB stick can be just as safe and secure means of storage as physical means, such as stainless steel back-up plates. As well, when both means are used together, it provides you with the ultimate web of back-ups in case of any emergencies. Encryption may not be something that is easy to do for everyone, but there are many third-party sources that will take care of encryption for you. Just make sure to disconnect your computer from the internet while you enter your seed into your computer and perform the encryption - do not trust an online encryption service! From there, it is up to you how you choose to store it, whether on a cloud or on a USB stick. The benefit of cloud storage is that the data is not tied to any one physical device and can be accessed from anywhere using the cloud password. However, this also means the data is slightly more accessible than if it were to be stored on a USB stick. Just remember that if you go the USB stick route, it might not be able to hold its own against fire and water quite the same as simple non-physical cloud data can. The flash memory used on a USB stick was also not designed to last beyond 10 years, so bear that in mind. Where and How to Store Your Seed Phrase Whether you have chosen to store your seed phrase on a stainless steel plate, USB stick, or simply a piece of paper, you’ll need to put it somewhere - and ideally, in multiple places in case one is destroyed or lost. The best advice I can give is where not to store your seed phrase. Where exactly you do end up putting your seed phrase is best kept private, so here are a few places you definitely don’t want to put your seed phrase if you want to keep it out of the wrong hands. Do Not Store Your Seed Phrase In… Bank Safe Deposit Box: Seems like a great place, right? Wrong - banks make mistakes, and as safe deposit boxes become less popular, they are making even more mistakes. Don’t lose your seed because of a rotten bank! Home Safe: Again seems like a great place - however, this is the first place a burglar will look. Even if they can’t open the safe, most small home safes are easy enough to move and cart away for cracking later. Under the Bed or Mattress: A classic place for hiding some money, it’s also one of the first places a burglar will sweep. The Fridge: You might think disguising your seed inside a container as food might make it go overlooked - but this is a common tactic for hiding valuables, so burglars might look here. Jewelry cabinet or dresser drawers: These are common places to store other types of valuables, so they will be quickly swept by a burglar. Get creative, but not so creative that you lose your recovery seed because you can’t remember where you hid it. Also, it’s important to consider backing up your seed in multiple locations. That way, even if one location is completely obliterated (say a tornado takes away your house), you still have your seed in another location. Shamir Secret Sharing - Spread Your Recovery Phrase Around Shamir Secret Sharing is an algorithm that allows you to split your seed into multiple seeds that, on their own, are useless. However, recombining a number of them will get you your recovery seed back. This is a good step to take if you want to share your seed with your lawyer, accountant, family members, etc - since it ensures no single one of them can access your entire recovery seed. The way Shamir works is it splits your seed in to multiple smaller seeds that you can hand out to trusted individuals. When you set up a Shamir backup, you decide how many ‘shares’ you want to create and how many shares are required to recover your entire seed - for instance, you can create 5 shares and say any 3 of them are necessary to recover your seed. Some hardware wallets, like the Trezor Model T, support Shamir Backups in a user-friendly way. The ColdCard utilizes a simpler protocol called SeedXOR to do the same. Tips for Ensuring Your Seed Phrase is Secure There are many general things to keep in mind when it comes to keeping your seed phrase safe and secure. Some of these things are common sense, while others might not occur to most people without a heads-up. Not all methods will be practical for all readers, but keep in mind that the more security methods you practice, the more secure your seed phrase will be. Do as much as you can to keep your seed phrase safe and secure and it will stick around for you when you need it. Don't Take Pictures or Screenshots of Your Seed Phrase Not taking pictures of your seed phrase is simple enough. Every picture you take creates an extra external file that can be duplicated, misplaced, or stolen. The smaller the digital footprint of your seed phrase is, the better. Just write your seed phrase on a piece of paper and keep it there until you have a safer place to store it long term. There are many different ways in which photos of your seed phrase may be taken that may surprise the average reader. For one thing, hackers and other third parties may retrieve an image of your seed phrase via security cameras, such as those at ATMs. As well, cameras on your computer, phone, and other personal devices could pose an even greater risk. For these reasons, minimizing the overall visibility and exposure of your seed phrase, both before and after documenting it in the physical world, is an absolute necessity. Don't Say Your Seed Phrase Aloud-- Ever! If you've ever been talking on the phone and had your Google Assistant interrupt you, you know that you're being listened to at all times. Whether outside in public or at home alone, there are third parties listening. If those third parties are interested, they may be able to gain access to your personal information. For this reason, refraining from saying your seed phrase aloud should be seen as a vital part of keeping your seed phrase protected. It's easier to spy on someone with audio than it is with visuals, so saying your seed phrase aloud makes it much more susceptible to being intercepted by those who may go on to misuse it. Do Not Store Your Seed Phrase in a Password Manager Source Storing your seed phrase in a password manager may seem like a secure and convenient way to back it up, but it comes with massive risks. A seed phrase is much different than a password for say, your Facebook account. This is because passwords are just authentication tools for centralized services - meaning if you get locked out of your account or hacked, you can contact a support number and go through some steps to regain control of your account. With Bitcoin, there is no support number by design. There is no central party which controls Bitcoin transactions, making it incredibly free and open - but that also means you must take responsibility for your seed phrase very seriously. If it falls in the wrong hands because your password manager is hacked, you can lose your bitcoin. Do Not Use an Online Seed Recovery Service If a website is asking you to enter your seed phrase - even if it seems like a trusted one to you - think twice before doing so. Most ‘online recovery services’ are scams in disguise, hell bent on stealing the seed phrases of innocent savers! Don’t be one of them. Use a Passphrase to Add More Security Trezor passphrase setting. If your wallet supports the addition of a passphrase, you should use it. The passphrase is a password you add to your seed, and it functions like a 25th word in your seed phrase. This makes your wallet much harder to steal, especially if you can memorize your passphrase. With a memorized passphrase, or one stored in a different location than your seed, your bitcoins are secure even if someone gains access to your seed phrase. Protect Your Seed Phrase from the Elements Whether you store your seed phrase in a digital cloud or on a steel plate, having some method of storage that protects your seed phrase from elements such as fire and flooding should be seen as a must. As discussed, steel plates can be made to hold up against most catastrophes, and cloud storage provides a non-physical means that can be just as secure as other means if you use the right encryption. Utilizing one or both of these means can help guarantee you maximum protection no matter what happens. Use Multiple Methods for Back-Up When You Can Using a couple of different methods for storing your seed phrase has a lot of advantages, but it also has some cons if you don't approach it with the right amount of caution. While using multiple avenues for storage grants you more protection, it also extends your overall profile, meaning that there are more areas that are open to attack. Still, utilizing at least two separate methods for back-up is generally seen as a good idea, as you have back-up just in case something happens to your back-up! You never know what's going to happen, and that's the whole point of seed phrases in general. Limit the Access of Your Seed Phrase As Much As Possible Of course, some people may opt to share their seed phrase with a trusted third party as a means of ensuring it's protection, but, in general, the fewer people you share your seed phrase with, the better. It's up to your own personal discretion who you share your seed phrase with and why, and it's in your best interest to use that discretion wisely. Don’t Talk About Your Bitcoin Holdings This may be the hardest tip for some, but it might also be the most important. If nobody knows you have bitcoin, or much of it, you reduce the likelihood that anyone will try to get your seed phrase or wallet. Just keep your mouth shut! What Will Happen to Your Bitcoin After You Die? As with any other asset, you should have some idea about how your Bitcoin will be handled after you die. Given that this is a relatively new avenue of interest, there is not a whole lot of precedent when it comes to passing down and inheriting Bitcoin. While many may think that they have to get a lawyer involved, all passing along Bitcoin really has to entail is the mere passing along of your seed phrase, along with some specific intent and inventory of your assets. When preparing to pass on your seed phrase in the event of your death, it's important to remember to also pass on a detailed account of your digital assets. Unlike physical materials, digital assets cannot be easily quantified through physical appraisal. Without being made aware of what exists, whoever inherits your funds may not even find them. Don't leave your family digging in your yard to find your seed phrase. How Do You Use a Seed Phrase to Recover Your Wallet? For most wallets, using a seed phrase is as simple as clicking the right set of buttons and typing it in. From there, the seed phrase will restore all of the contents and data of your wallet to whatever device your are using. In this way, using the seed phrase means that you can have your wallet with you wherever you go, no matter what, even if your wallet gets lost or destroyed-- all you really need is your seed phrase. Again, do not use any online seed recovery services! They are likely scams. Whether you are using a mobile wallet such as BRD or a hardware wallet such as a Trezor or Ledger, the means for utilizing your seed phrase are essentially the same-- the only difference is the hardware you are using to do so. With apps like BRD, you simply start up the app and are given the option to recover a previous wallet. You will then select the length of your seed phrase and input it exactly as it is shown. With hardware wallets like those made by Trezor, you will be given the same option for recovery once you boot up the device and install the firmware. You will be given the same choice to determine the length of your seed phrase, and then asked to input it just the same. If Your Seed Phrase Is Secure, Your Funds Will Be, Too! At the end of the day, it's important to remember that the more care you put into properly storing and protecting your seed phrase, the safer your funds will be, for both you and your loved ones. The digital age poses a vast array of new dangers, and the world of cryptocurrency is a hotbed for almost all of them. If you wish to take proactive measures in ensuring the utmost protection of your bitcoin, keeping your seed phrase both secure and accessible is a must. Your seed phrase may not seem like a big deal now, but it will seem like a big deal when it comes time to use it. If you want you and your Bitcoin funds to be protected in the event of an emergency, or even in the event of your death, taking the proper means to store and protect your seed phrase is the essential first step. Ready to purchase some Bitcoin? You can start with as little as $5 - learn how to buy bitcoin by clicking the image below, and learn how to store it securely with our guide to Bitcoin hardware wallets.