While thinking about the risks of writing your seed phrase on a piece of paper, we can think of quite a few.
In this article, we’ll take a closer look at what the risks exactly are and what you should do to keep your seed phrase safe from theft and loss.
First: the importance of your seed phrase
A seed phrase gives you access to your Bitcoin and other cryptocurrency wallets. If someone other than yourself gets their hands on your seed phrase, they can restore your wallet and access your funds from wherever they are.
In this way, the seed phrase is an advanced password to your blockchain wallet. A powerful recovery key.
No matter where you are or what device you want to work on, you can always restore a wallet out of thin air with the seed phrase.
This means that a seed phrase is also the best guarantee to recover a lost wallet. If your laptop or cell phone crashes, you can use the seed phrase to restore your wallet on a new device. So the seed phrase makes your wallet “portable” or “transferable” and can be used securely on different devices at the same time.
All this should make it clear that you need to keep your seed phrase safe at any time, right?
Moreover, since it is important that you alone know your seed phrase, or where it’s stored, you may think it’s a good idea to write it down on a piece of paper.
At first glance, this seems like a safe and secure way. You can keep the piece of paper in a safe place or keep it in a secret location. Yet, there are also quite a few big risks associated with keeping a seed phrase on paper.
Keep reading, because you might want to change your strategy from now on.
A piece of paper is perishable
Paper is a perishable material. Think for example of the influence that moisture, sun, or simply time have on paper. It discolors and letters may no longer be legible over time.
If your dog gets a sheet of paper between his teeth, your pet can shred or eat it in no time. Just think of the many stories of people missing out on a fortune because their pet eats a winning lottery ticket or it accidentally disappeared while washing clothes.
The risks of keeping a seed phrase on paper are basically the same.
You may think it’s a safe way to store a seed phrase. But if a fire breaks out or an earthquake occurs, chances are you won’t find the piece of paper again.
And what about keeping the paper in a safe? This can be a good and fireproof solution, but for the price of a secure safe, there are much more secure solutions to keep your seed phrase safe. In theory, a safe can still be stolen with a piece of paper inside it.
Writing your seed phrase on a piece of paper is not safe from theft
Just as you shouldn’t leave cash lying around in your house or in a hotel room, it’s also a good idea to secure your digital capital properly.
Leaving a piece of paper with your seed phrase carelessly somewhere may seem harmless to you, but it is not.
If you are somewhat knowledgeable about cryptocurrencies, you know how it works. It doesn’t take much to use a seed phrase to restore a wallet and spend funds before you have a chance to notice it.
Once you get your seed phrase stolen, it will be very hard to know where your funds are and who has them.
Paper is “static”
There is only one copy of a piece of paper containing your seed phrase, unless you print or make copies of it multiple times.
If you only have one copy, then you are extra vulnerable because it is always possible to lose a piece of paper. So it’s a static way to keep your seed phrase.
But, if you make multiple copies, then you increase the chance of a rogue person getting hold of one of these copies. Moreover, it is then also no longer possible to find out who exactly got hold of that copy, which makes the whole thing unverifiable.
With writing your seed phrase on a piece of paper, you’ll lose all control. Even more when you die.
Have you ever thought about what happens to your Bitcoin when you die? You can prepare for this by writing a seed phrase on a piece of paper and keeping this in a safe.
But even then, as we’ve written in this article, there is always a chance that someone will get hold of your seed phrase and unlawfully take your funds.
These problems clearly show that writing a seed phrase on a piece of paper is not a great idea.
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Fortunately, there are a lot of better solutions, just like Inheriti®, which are perfectly in line with the philosophy of crypto and blockchain.
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