Key Insights
Your seed phrase holds access to all of your crypto assets, so it is important to guard it fiercely.
Private keys grant direct access to your wallet itself, and should be handled with extreme care.
Any crypto investor should have multiple layers of security for safety and peace of mind.
Welcome to the world of crypto! One of the first things you’ll learn as a newcomer in the crypto space is the importance of safety.
If you have properly set up your crypto wallet, by now you should hold the keys to all of your digital assets. However, with great power comes great responsibility, and your seed phrase (alongside your private keys) is what gives you ultimate control over your funds.
Unfortunately, this means that if you lose them, you lose it all. Here is a guide through the best practices for keeping these credentials safe.
Think of this article as one chapter of your crypto security bible.
So what is a seed phrase?
Your seed phrase is a series of 12 to 24 words. It is generated the first time you create a new crypto wallet. This group of words are important, because they help you to restore your wallet if you ever lose access.
You should treat these words as the master key to your crypto vault. This means that anyone who has it can take your funds.
An example of a seed phrase
This brings us to the next side of the coin: Private Keys.
Private keys are a unique group of alphanumeric characters. If that sounds confusing, a private key can look something like “0xba53ce…bced6253” or “KwoHkH61VjGg2wDohD3KkM9hG2g4hK2g2K”.
They are usually 64 characters long and correspond to your public wallet addresses. These keys are used to authorise transactions. They prove that you own the crypto in that address.
Note that each address has its own private keys, and keeping these secret is highly important.
So how do you keep your private keys safe? The first thing to note is that you should write it down correctly at all times.
When you first get your seed phrase, keep it in writing, and double-check each word along with the order. Do not save it on your computer, phone or cloud storage, because digital copies are vulnerable to hacking.
This cannot be stressed enough.
Your seed phrase should live offline. Even better, consider using dedicated metal seed phrase storage devices and keep them away from any internet-connected devices.
Never share your seed phrase with anyone. No legitimate crypto service will ever ask for it, and you should consider storing multiple copies in separate locations. This protects you from a single point of failure, like a fire or theft.
For that extra kick of security, you can encrypt your written seed phrase. Be sure to use a strong and memorable password that you won't forget.
Scammers will try many tricks to get your seed phrase, so be wary of emails, messages or websites asking for this information.
Where your private keys are stored depends on the type of wallet you use. Software wallets store them on your device, while Hardware wallets store them on a physical device.
For software wallets and exchange accounts, be sure to use strong passwords.
Always enable Two-Factor Authentication (2FA) whenever possible for an extra layer of security beyond just your password.
Finally, be careful where you click, because phishers are always attempting to access your device and steal your private keys.
If your holdings are large, consider investing in a hardware wallet. These devices store your private keys offline and require physical confirmation for transactions.
Consider using different wallets for different purposes, and keep large amounts of crypto in cold storage (offline wallets). Then use hot wallets (online wallets) for smaller transactions.
Hardware wallets
Always stay informed about the latest security threats and follow reputable sources on platforms like TradingView, CoinGecko, and CoinMarketCap for news and updates.
Your seed phrase and private keys are the most important aspect of your crypto investment journey. Follow these best practices to reduce the risk of losing your assets.
Remember to stay alert and put the security of your crypto first, because your financial future just might depend on it.
Disclaimer: Voice of Crypto aims to deliver accurate and up-to-date information, but it will not be responsible for any missing facts or inaccurate information. Cryptocurrencies are highly volatile financial assets, so research and make your own financial decisions.