The safest way for you to store your cryptocurrency is not on an exchange, but through a wallet where you are in complete control of the Private Keys to your funds. This does mean, however, that you need to find a safe way to store the wallet recovery Seed, the ultimate fail safe for your funds. So what are the options for how to store a crypto wallet seed?
When you set up a non-custodial wallet, one in which you control the Private Keys for the associated funds, you’ll be required to make a record of something called a recovery Seed, or recovery Phrase.
A Seed is a collection of what are known as mnemonics, memorable words. Think of it as an extended password that a non-custodial wallet generates as a way to recover all funds, should you lose access to the wallet for whatever reason.
You don’t need a Seed for regular access to a wallet, whether an App, Browser Extension or Hardware Device. On a day-to-day basis you’ll use more conventional credentials to access your wallet, like a pin code or biometrics, so a Seed is something that will rarely, if ever, be needed, but remains vitally important.
As a fail safe, your Seed represents all the value a crypto wallet holds. Lose the Seed and all it takes is your phone to be stolen or die, and those funds could die with it. So how should you store your recovery Seed?
Whatever you do, don’t store your recovery Seed online, because you have to assume that being online means being vulnerable to hackers.
Whatever you do, don’t store your recovery Seed online, because you have to assume that being online means being vulnerable to hackers. So that rules out writing it down, taking a photo and storing a digital file locally, or in the cloud.
One look at the Spam in your email inbox should remind you of the constant attempts being made to trick you into clicking dodgy links that might give someone access to your computer, at which point your recovery Seed will be compromised.
So if the first rule of safe recovery Seed storage is to keep it offline, what is the best form of offline storage?
The majority of non-custodial wallet users will write their Seed down on the most obvious offline device - a plain old piece of paper. The simple reason is that paper is cheap, simple to use and convenient.
In fact, most hardware wallet vendors will provide a formatted recovery Seed sheet for exactly that purpose.
If the value of funds stored on your wallet are modest - which is obviously relative - then using a piece of paper to store your Seed is understandable, but it is far from the most secure option, for some pretty obvious reasons.
There is a reason that paper is so cheap, because it is a very basic material that doesn’t respond well to water or heat, either directly or indirectly.
It would only take a coffee cup to be knocked over, or a leaky pipe to render your paper Seed useless. Even extended exposure to a damp or a humid environment could be fatal.
In the unfortunate event of a fire, your Seed is toast, unless you’ve stored it in a fire-proof cabinet or safe, which seems unlikely if cost is your priority.
There are other reasons why paper isn’t a great way to record your Seed, because certain insects and most rodents might decide to make a meal or a nest out of it.
Now you might be reading this and thinking that this is all ridiculous scaremongering, in which case you’d be right. These are all unlikely, but possible scenarios.
Your house is unlikely to be burned down or flooded, but you need insurance because though these types of events have a tiny probability of happening, if they do, they carry a 100% chance of ruin.
You can reduce the odds in your favour by laminating your recovery Seed, or using special types of paper that are resistant to water or tearing. But if you really want the ultimate security, there are better offline options for storing a crypto Seed.
For those crypto users who take the security of their Seed seriously, recording it on a Steel sheet is the preferred method. It may sound extreme, but it is hard to argue with.
Stainless steel will be resistant to both corrosion and the extreme heat of a standard house fire. You simply need to emboss a thin plate with the 12-24 phrases of your Seed to be confident that in almost all disasters, it will survive. The sheets come as part of a kit which includes simple methods to emboss the letters.
Though a steel sheet solves the durability issue for Seed storage, that still leaves you with the question of where to keep it?
A steel plate may protect your Seed from the elements, but you could still mislay or be the victim of a burglary. This problem has no ultimate solution because one way or another you're assuming some form of risk, even if you use a safety deposit box at a bank you are assuming counterparty risk by trusting the bank.
Whatever you decide, you should find a hiding place that you consider extremely secure and tell as few people as possible, and consider making two versions, stored in two completely different locations.
You might think that subdividing a Seed is safer, but this actually multiplies the risks, as losing any portion is the same as losing the whole thing.
Some forums suggest memorising your Seed is the safest option for protecting your Seed, but unless you are a memory champion you'd be very brave to rely on biological storage.
There is no getting away from the requirement to take responsibility for your Seed; this part and parcel of crypto self-custody. It is up to you to decide what is an acceptable level.
A good thought experiment is to imagine how upset you’d be if you lost access to your wallet. Translate that feeling into an appropriate level of protection.
Remember, there is no other method of recovery, no support email/phone/chat. There are plenty of people prepared to rip you off pretending otherwise, but without your Seed, losing access to your wallet will be terminal.