Best Practices for Securing Your Wallet Backup | Posted by SatoshiLabs | January 2025
You’ve probably heard this before. Not a key, not a coin. When it comes to digital assets, security is of utmost importance. Whether you’re an experienced investor or just starting out, understanding how to properly store your wallet backup (also known as a recovery seed) is essential to protecting your digital assets.
If your wallet backup is corrupted or lost, your funds may be permanently lost, so it is important to take the necessary precautions.
In this guide, we’ll look at best practices for protecting your cryptocurrency wallet backups, highlight common mistakes to avoid, and suggest ways to keep them safe.
A wallet backup (also known as backup, recovery seed, seed, seed phrase, BIP-39 seed phrase, mnemonic, recovery phrase) is an English word containing all the information needed to recover a wallet (e.g. Bitcoin access). This is an ordered list. or other on-chain cryptocurrency funds). Wallet Backup provides full access to your connected wallet (private keys are mathematically derived from your wallet backup). This is why you need to keep your wallet safe.
Think of this as your password to your cryptocurrency assets. It allows you to access, transfer and manage your funds. Otherwise, your assets will be permanently lost.
Setting up a hardware wallet like Trezor will provide you with a wallet backup. This unique phrase is generated during the wallet initialization process.
Losing or exposing your wallet backup means:
- You will lose access to your funds forever.
- No third party, including Trezor, can assist in recovery.
Therefore, storing your wallet backups properly is one of the most important aspects of cryptocurrency security.
Important things to know: Wallet Backup is a ‘plain English’ representation of the random numbers from which all keys and addresses are mathematically derived.
This is an ordered sequence of 12 or 24 words for a wallet using the BIP39 protocol, selected from a list of 2048 words. For the latest SLIP39 protocol, it is a sequence of 20 words selected from a list of 1024 words.
When writing down your wallet backup, be sure to copy the words in the order they appear.
You should keep your wallet backup private and secure to avoid exposing your cryptocurrencies to risk. Having a secure wallet backup means you can recover your Bitcoin or other digital assets in case of hardware failure or loss of your device.
To keep your cryptocurrency assets safe, avoid these common mistakes:
1. Rely on digital devices
Storing your wallet backup on your computer, phone or cloud service is very risky. If your device is hacked or compromised, attackers can easily steal your wallet backup and access your cryptocurrency.
Rule of thumb: Do not keep digital copies of your wallet backups (this includes screenshots, photos, emails, Dropbox wallet backups, etc.).
2. Share wallet backup
Be careful with whom you share your wallet backup. Sharing your wallet backup is like handing over your cryptocurrency assets to another person.
3. Use of unsafe physical locations
It’s common practice to keep wallet backups on paper, but understand the risks involved. It is paper after all! If stored carelessly, it may be exposed to risks such as theft, fire, and water damage.
The most effective solutions for safely storing your wallet backups are:
1. Method using pen and paper
- Write down your wallet backup on paper in clear, legible handwriting. Capitalization is recommended. The Trezor hardware wallet comes with a pair of wallet backup cards that you should use to record your words when backing up your device. This is a highly recommended step when setting up Trezor.
- Keep your wallet backup cards safe from theft and damage
- Consider making multiple copies and keeping them in separate, safe locations.
weakness: Paper is vulnerable to fire, water and physical damage over time.
2. Metal Backing Tool
We highly recommend this. Metal backup tools such as: Trezor Keep Metalis designed to protect your wallet backups from:
- fire
- water
- pressure and corrosion
This is ideal for long-term storage.
Get Trezor Keep Metal for as low as $79 here.
3. Use of home safe
Keeping a backup of your wallet in a hidden safe at home is a good way to control access to it. However, just knowledge of the safe is enough to attract the attention of a potential thief, so if you choose to use this storage method, make sure you store it in a discreet location out of sight of guests, housemates, or anyone else. You can also spend time inside your home.
Some people may consider a bank safe deposit box. However, be aware of your bank’s policies, which may allow access to your box under certain conditions.
Please see the following video to learn more:
4. Multi-share backup
Trezor offers the following unique features: Multi-share backup. Basically, this allows you to split your wallet backup into several parts and store them separately.
For example, in a 3/5 multi-share backup scheme, the total number of shares is 5 and the threshold is 3. This means you can use 3 of these shares to recover your wallet. This is beneficial because if one or two of your shares are compromised in any way, your entire wallet backup (recovery seed) will not be exposed. This redundancy means there is no longer a single point of failure like with the regular BIP39 backup standard (i.e. the 12-word recovery seed used by default in most hardware wallets).
Even if one part is lost or damaged, you can use the remaining part to recover your wallet. This greatly reduces the risk of losing all your backup copies at once.
Learn more here.
5. Multisig wallet
For advanced users, multi-signature wallets add an extra layer of security. Multi-signature wallets require multiple keys to authorize transactions, reducing reliance on a single wallet backup.
Multisig is a method of protecting your wallet by requiring approval of multiple private keys stored on separate devices when transmitting a transaction. Trezor recommends the SLIP39 wallet as a simpler, yet equally powerful alternative in terms of backups, but Trezor devices are fully compatible with multi-signature setups, so you can choose the option that best suits your needs.
Here are more details about this:
We established the hardware wallet industry. Our founders, Marek Palatinus and Pavol Rusnak, were part of the team that introduced Bitcoin Improvement Proposal 39 (BIP39). This is a protocol introduced as a means to create deterministic wallets. A method of generating human-readable mnemonic sentences (easy to read and write) from random data that serves as a backup for wallet recovery. In short: a wallet backup (aka recovery seed).
It is now widely adopted in the cryptocurrency industry. Learn more here.
The Trezor wallet started out using BIP39 for wallet backups (recovery seed phrase). Resetting your Trezor device will create a unique 12, 18 or 24 word wallet backup (recovery seed). This seed represents your private key and is essential for restoring your wallet information if your device is lost, stolen, or damaged. BIP39 has become an important part of the Trezor security protocol and can be used in conjunction with other BIPs such as BIP32 (Hierarchical Deterministic Wallet) and BIP44 (Multi-Account Layer for Deterministic Wallet) to provide an optimal security model for cryptocurrency users.
The recently introduced Enhanced 20-Word Backup Standard (SLIP39) ensures a more robust process for backing up and recovering wallets compared to existing standards. With an upgraded user-friendly word list and seamless transition to multi-share backups, SLIP39 provides superior security without a single point of failure.
Once your wallet backup is stored safely, it is important to protect it over time. What we recommend is that you take the time to assess the threats you are most likely to face. It is important to understand that everyone has a different threat model and this can change over time. Do more while considering environmental hazards, physical attacks, remote attacks, and more. See here for more details: https://trezor.io/learn/a/keeping-your-wallet-backup-safe
thus,
1. Check regularly for wear or damage. For example, if your wallet backup is stored on paper, check it periodically for discoloration or physical damage.
2. Protect yourself from natural disasters. A case in point is protecting your wallet backup against a house fire, flood, or leak.
3. Plan your inheritance. If you want to pass on cryptocurrency assets, make sure you have a secure and private inheritance plan in place. Use trusted legal advice or make sure your heirs understand how to securely access your wallet backup.
To protect your wallet backup, avoid these risky practices:
- Do not share your wallet backup with anyone.
- Do not keep digital copies of your wallet backups (this includes screenshots, photos, emails, Dropbox wallet backups, etc.).
- Do not enter your wallet backup anywhere unless prompted to do so on your Trezor device.
Additionally, even if you speak to a customer support representative, Trezor employees will not ask you to tell them your wallet backup.
Pros: Simple, cheap
Cons: Vulnerable to fire, water and damage.
Advantages: Durable and resistant to disasters
Cons: It costs money (even though it’s only $79).
Advantages: High physical security, restricted access
Cons: Requires proper storage
Pros: High physical security
Disadvantage: Depends on bank access
Benefits: Reduced risk of single point failure
Cons: More complicated setup
Pros: Advanced security
Disadvantage: Requires technical expertise
Trezor combines ease of use with strong security features, making it a top choice for protecting your wallet backups.
Here’s what sets Trezor apart from other wallets:
- Trezor has been audited by independent security researchers and proven by years of track record in the market.
- Our software and hardware are open source and publicly available. This allows everyone to benefit from a community-tested wallet design and provides strong protection against real threats.
- The Trezor device and its custom software interface, Trezor Suite, are easy to use, making them suitable for both beginners and advanced users of cryptocurrency.
To protect your digital assets, it is important to have a wallet backup (recovery seed). By following the best practices outlined in this guide, you can help protect your digital assets from loss, theft, or damage.
Trezor’s hardware wallet and metal backup solutions, combined with advanced methods such as multi-share backups, provide a reliable and user-friendly way to protect your wallet backups. Don’t leave your cryptocurrency to chance. Take control of your security today.
we are Metal backup like Trezor Keep Metal. We do not recommend storing your wallet backup digitally.
This depends on several factors. It is important to define a threat model. Consider these risks and choose a safe, hidden location. This video may help.
You will lose access to your funds permanently. There is no recovery mechanism for lost wallet backups.
No, storing your wallet backup online exposes you to the risk of being hacked. Always save offline.
yes. Anyone with a wallet backup can access and steal your funds. Keep it private and safe.
no. Trezor does not store wallet backups. You are solely responsible for the storage and security of such information.
