Cryptography is employed in blockchain-based cryptocurrencies to encrypt and decrypt data. The private key is a lengthy number that enables blockchain transactions. People are given the public key so that they can send cryptographic account information that can only be decrypted with the private key. And the blockchain address is derived algorithmically from your public key.
It's unrealistic to expect you to remember or type your private key every time you want to access to your wallet. This is why seed phrases were created.
What is a Seed Phrase?
A Seed Phrase is a collection of random words generated during wallet setup that allows you to regain access to your crypto wallet if you lose or delete it.
A seed phrase, also known as a recovery phrase, is perhaps the most critical layer of protection for cryptocurrency users. In the event that your device or hardware wallet fails, seed phrases can act as a last line of protection, preventing you from losing access to your cryptocurrency. Computers fail, phones are damaged, and hardware wallets are lost, stolen or destroyed. If such an unfortunate event occurs, you will be relieved that your seed sentence is carefully hidden.
Because seed phrases are easier to record and communicate than private keys, they allow for less human errors in backups. Even better, they can generate a large number of keys from a single master key. Because a single seed can create an apparently limitless number of receive addresses, users can avoid address reuse.
Keep it Safe
Losing cryptocurrency is a nightmare for all cryptocurrency holders. If the seed phrase is lost to an attacker, the crypto money cannot be recovered.
A seed phrase should always be kept secret, because anyone who knows it can import a copy of your wallet to their device and empty it. They can do this since knowing your seed phrase grants them access to your private keys. This is why private keys are important and why someone knowing your seed phrase could cause significant damage.
It is strongly recommended that you do not create a digital copy of the seed phrase. This includes not emailing it to yourself or texting it to a friend. Some people save their seed phrase in password managers, however this isn't foolproof because hackers have successfully cracked weak passwords and gained access to every password in a person's vault, including seed phrases.
An occasional method of fraud involves someone claiming to be from a wallet provider requesting you for your seed phrase to authenticate ownership of a wallet. No legitimate company will ever request this information from you. So be on the lookout for this form of scam.
How to Store a Seed Phrase?
If you don't want to risk losing access to your cryptocurrency, you need to store your seed phrase carefully. Even if it is password protected, a seed phrase should never be stored digitally. If the device that your data is stored on goes online, it could be vulnerable to hackers.
The ideal approach would, of course, be to memorize the seed phrase, but human memory is fallible, so a decent safety method is to take a pen and paper and write it down and make sure it never falls into the hands of the wrong people. This includes protecting the paper with the seed phrase from fire, flood, or anything else that might make it unreadable.
Safe manufacturers provide models with different degrees of protection against fire and water. If buying a full-fledged safe is out of the question, a steel wallet is a less expensive choice. The steel wallets, about the size of a credit card, feature lettered tiles designed to fit into built-in tracks, which users can modify to spell out their seed word. A steel wallet provides protection from fire, flood, rust, and other hazards in a small package that is far more durable than paper.
A mix of several backup levels is the best option. For example, you could write your seed phrase on a piece of paper and store it in a fire safe, or you could etch it into a piece of wood or metal. Bank safes are an option, even if they are inconvenient to use.
What Happens if You Lose a Seed Phrase?
Unfortunately, if you lose your seed phrase, you will no longer be able to access your funds. This, however, is a feature of seed phrases, not a flaw. If there was a workaround for lost seed phrases, they would be useless. The seed phrase must always be safe at all costs. If you are unsure about securing your seed phrase, you can use a custodial service.
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