The Ultimate NOT-to-do List for Seed Phrase Storage | by Henrique Centieiro | Dec, 2022

Just don’t!

What’s the best way to practice self-custody and take control of your crypto assets? Own a hardware cold wallet and be responsible for keeping your own seed phrase. This is the ultimate way to avoid potentially losing your precious crypto fund over any third-parties where you keep your crypto asset at.

I can’t stress enough how important it is to keep your seed phrase safe and sound, as your seed phrase is the last resort to recover your wallet if anything happens to it (situations like the wallet get stolen/ malfunctioning/ goes missing, you forget the PIN to the wallet, etc.). In my last article, “The Ultimate Guide to Store Your Seed Phrase,” I explored the importance of seed phrases and shared some tips on how to choose the best device for storing your seed phrase.

Today, I want to share a list of 10 Not-To-Dos when it comes to storing your seed phrase in the SAFEST WAY POSSIBLE. Let’s get into it!

1) Keep your seed phrase at stupid places

Stupid places, including out in the open, like writing the seed phrase on Post-it and sticking it on your laptop, keeping it in the drawer of your desk, etc. Generally speaking, anywhere with easy access for random people or potential attackers is a bad idea.

Please don’t do like Ilya Lichtenstein and Heather Morgan: they left the seed phrase for $3.6 billion worth of stolen Bitcoin in the open and the FBI was able to easily seize it. 🤷🏾‍♂️

Not only that, I’ve seen people advising to keep the seed phrase in the safe box at home; to me it just doesn’t sound right. If you’re a burglar, I guess the first thing you will look for when you break into a house is the safe box, right?! How could that be a good idea?

Not to mention another silly suggestion of keeping your seed phrase together with your hardware wallet. Hmm really? That’s literally the worst suggestion! If anyone finds only your hardware wallet, they can’t do anything with it because it needs your PIN to access, and it will be automatically locked or erase its data after several unsuccessful attempts. However, if you keep your seed phrase together with the wallet, you’re literally welcoming the thief to recover your wallet easily and drain all your funds.

Seriously, when it comes to the location to keep your seed phrase, put some extra effort and imagination, as the inconvenience of a compromised or stolen seed phrase just isn’t worth it!

2) Use “Brain Wallet”

No matter how good you think your memory is, trusting your brain entirely with your seed phrase is a bad idea. You’re smart and sound now doesn’t mean a medical issue or accident will never happen some day in the future. If you encounter those unfortunate scenarios, the last thing you want to happen is losing your crypto fund as well. Not to mention, there will never be a chance for your loved ones to recover your funds if you die someday unexpectedly, as your seed phrase will just be gone with you.

It’s just not a smart idea to make your brain a single point of failure, when there are many better options out there.

3) Only use paper to store the seed phrase

Since the seed phrase is so precious, something feels off when I think about the most popular way nowadays to store seed phrases, which is to write it down on a small piece of paper.

The best medium to store seed phrases should be able to survive unpredictable situations and accidents in our lives, that include and not limited to a house fire, flooding, house collapse, or getting thrown out accidentally, and paper itself is certainly not a good material to store such precious information.

If you ever see very old newspapers or books, you will notice paper can become unreadable because of years of high humidity and mold formation. It can also be eaten up by insects or rats, and ink from a pen can fade as well. And it for sure will not survive a house fire, leaky roof, house collapse, etc.

The ideal medium is metal that is not affected by rust, water, or fire. Stainless steel is a popular option, and there are a lot of stainless steel seed phrase storage devices on the market nowadays as we explored in the previous article.

4) Take photos of your seed phrase using your phone

It’s so common to take photos of everything nowadays with your cell phone, but taking photos of your seed phrase is certainly a big no-no!

Your phone is not a safe place for keeping your seed phrase as well as any other important private information. Specialized software especially created by hackers can sweep devices for traces of seed phrases, which can be very easily recognized. Remember, anything digital is probably not a good medium to store your seed phrase as they’re way more exposed to potential hackers. You can check more cybersecurity tips and hacks here.

If you really, really want to take a photo of your seed phrase, use a polaroid camera instead. However, just be aware the photo can still be damaged or faded over time, the same as paper.

5) Store your seed phrase on the Cloud (or anything digital)

People need to be reminded that the whole purpose of a cold wallet is to be able to keep the private key and seed phrase entirely offline. In most cases, when you do a transaction with a cold wallet, it is signed with your private key on a secure enclave of a dedicated hardware device (that little device that looks like a USB drive). What’s leaving the device and being broadcasted to the internet and to the blockchain are the signed transactions, not your private key. Such security measures prevent hackers or malware from access to your funds.

If you are well aware of this, you would realize storing your seed phrase on the cloud or anywhere digitally doesn’t even make any sense. Keeping your seed phrase entirely offline is the only way to go, to be as far away as possible from any potential hackers.

This applies to cloud storage, your phone, computer, or even photocopiers and printers that can leave traces of your seed phrase. Hackers can guess the password for your cloud account (iCloud, Google Drive, Dropbox, etc.) and easily find your most precious info.

6) Saying too much

When it comes to your crypto asset, wallets and where you store your seed phrase, be aware of verbal operational security as you never know who’s listening.

If someone finds out where you keep your seed phrase, it’s extremely easy for you to lose all your crypto assets. And just because someone doesn’t seem to care about your crypto assets or anything crypto-related in general at the moment, doesn’t mean they wouldn’t care about it in the future.

I know you may want to brag to your friend Victor how much Dogecoin you are holding, but maybe it’s best just to keep your mouth shut.

7) Encrypting or making your seed phrase too hard to read

Avoid making your seed phrase super hard to read/ understand when you record your seed phrase. If you use some sort of elaborate scheme to write down your seed phrase or even encrypt it, chances are you may not be able to decipher it back after 5, 10 or even 20 years.

When you need to recover your wallet using your “encrypted” seed phrase after many years, you will probably just forget how you did it in the first place. Not to mention, it would be very hard to explain it to your loved ones if anything unfortunate happens to you.

Remember, you need to make your seed phrase hard to be recovered, not hard to be read. Make it as readable as possible so both you or your loved ones can read it after years. Don’t be your own enemy when it comes to storing your seed phrase!

8) Not making your seed phrase tamper-evident

The best seed phrase storage should be able to allow you to ensure no one has found your backup and copy your seed phrase behind your back. A tamper-evident seal does the job here.

There are some tamper-evident metal seed phrase storage devices available on the market that have a unique identifier that makes the device harder to forge and can be easily recognized if they have been tampered with.

Or, you can use some kind of homemade tamper-evident seals to protect your seed phrase, something like the warranty void stickers or even nail polish can do the job.

9) Not stamping or engraving your seed phrase yourself

When you record your seed phrase on one of those seed phrase storage devices, always, always do all the stamping/ engraving job by yourself!

There are some seed phrase storage device products out there that offer the service to stamp/ engrave your seed phrase for you, and honestly, that’s unbelievable! That totally destroys the purpose of keeping your seed phrase not possible to be tampered with by anyone.

A rule of thumb is, anything that requires you in any way to reveal your seed phrase, is unacceptable. Just put in the work for once and do the work by yourself.

On the other hand, when you mark down your seed phrase, make sure to double-check and triple-check, and don’t ever change the order of the words. Any silly mistakes made will cause you a big consequence of potentially losing all your funds.

10) Ignore potential personal data leak while purchasing your seed phrase storage device

Most people don’t recognize the risk of potential personal data leak when you get your seed phrase storage device (same as purchasing hardware wallet) through online purchase.

Purchasing these devices online and getting them sent to your home means your home address is associated with crypto asset activities, and potentially that’s where you will store your seed phrase. Customer data leak or bad practice of sharing customers’ data is not that uncommon in companies and can potentially expose yourself to some unwanted risks.

Consider purchasing these devices from manufacturers that have some sort of data-dump policies, getting them delivered to a P.O. Box, or purchasing them directly at authorized booths at crypto events.

To wrap up…

Remember what I said earlier? The inconvenience of a compromised or stolen seed phrase just isn’t worth it, so it’s totally worth putting in some extra effort when it comes to storing your seed phrase the most secure way possible. I’m sure this NOT-to-do list is helpful for your seed phrase storage journey. If you have any additional tips, please do share with me!

Here’s a special shoutout to Ms. Bee Lee, for her crucial effort that contributed to creating this article.

If you’re interested in Blockchain, Crypto, NFTs, Metaverse, Fintech and DeFi, don’t forget to check out my highly-rated and super fun courses:

YouTube: Crypto Henri
Twitter: @henriquecentiei
LinkedIn: Henrique Centieiro

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Author: Traciwininger

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