What’s the worst and best way to keep a mnemonic safe under a mattress, at the seams of luggage, or even when rolled into a cigar? The key to unlocking and recovering passwords is a mnemonic phrase, which should be safe.
Especially now that prices are low and cryptocurrency tourists have checked out, it might be time for a cryptocurrency security clean-up. Security starts with a mnemonic phrase, sometimes called a recovery phrase.
It’s undeniable: Bitcoin and the cryptocurrency space are largely in the clutches of a bear market. Since Do Kwon’s Terra experiment vanished, a cryptocurrency contagion killed the most prestigious exchanges, leading many self-sovereign advocates to chant “not your keys, not your coins.”
In fact, hardly a day goes by when another “trusted” cryptocurrency lender freezes customer withdrawals. From Singapore-based cryptocurrency lender Vauld, to Thailand-based cryptocurrency exchange Zipmex with 200,000 customers, to world-renowned Celsius exchange, many centralized lending platforms have suffered a similar fate, making sure to bring their customers in 2022. Heartbreaking consequences.
These situations are a timely reminder to keep your keys safe and keep them in a safe place. So, despite the low prices and the bottoming out of trust in centralized exchanges (places that claim to take care of cryptocurrencies), now is the perfect time to improve the security of crypto assets.
Seed Phrases Save Lives
The seed phrase, sometimes called the private key, is a list of 12 or 24 words that form a mnemonic phrase. For example, hardware wallets or cold wallets contain these keys, providing a convenient way to send or “sign” funds.
As human rights activist and chief strategy officer at the Human Rights Foundation, Alex Gladstein, often says, mnemonics can save lives when done right. For example, if the thief stole the hardware wallet but not the mnemonic phrase, this is not a critical issue – the mnemonic phrase can be used with the new wallet. These 12 or 24 words can be used anywhere in the world to access Bitcoin (BTC) or cryptocurrency funds if the government or bad actors force you to flee.
Goldbug and Bitcoin skeptic Peter Schiff once screwed up his seed phrase, confusing it with his password. This is the first mistake to avoid. Now, here are some other examples that don’t store mnemonics.
The Bitfinex couple, who own billions of bitcoins, took home the first prize for storing their mnemonic phrases in their cloud storage accounts. As Cointelegraph reported, cybercriminal Heather Morgan and her cybersecurity expert husband Ilya Lichtenstein stored their mnemonics in a cloud storage account. So, at the time of reporting, the FBI just had to crack their iCloud password to gain access to over $4 billion in BTC. The lesson here is not to store mnemonics on the internet. That means your Evernote notes, email drafts, and even low-engagement tweets:
Some posts have low engagement. This is the best place to store my mnemonics.
sun. match. hope. Air. Rocket. bell. finger. pad. bath. Grass. lamp. Congress.
— Karma is hibernating (@Karma_Zeus) July 17, 2022
Also, as Cointelegraph reported, never type a mnemonic phrase on the phone. Why? Because, as one Redditor realized, smartphone text prediction can actually guess mnemonics. Text prediction is sometimes useful for complex spelling or emoji, but it can backfire when it comes to protecting personal wealth.
While it sounds like a good fit, a refrigerator isn’t an ideal place to “refrigerate” cryptocurrencies either. One Bitcoin enthusiast answered the question “The fridge” “Where’s the weirdest place to store mnemonics?” without explaining whether mnemonics should be stored in the fridge or on top of the fridge. As it turns out, a non-fungible token (NFT) fan has stored a mnemonic on the fridge:
Best way to store seed phrases https://t.co/9k0nHFNjeK pic.twitter.com/MpcRvwGc2m
— LazyTec (@LazyTec) July 15, 2022
The worst place to store seed phrases is poor memory, according to Kristina Lucrezia Cornèr, editor-in-chief of Cointelegraph. Indeed, unlike the dates of historical battles, car keys, or the names of acquaintances in the course of your life, mnemonics should be kept in mind wholeheartedly.
I guess it’s the one I don’t remember
— Kristina Lucrezia Corner (@KristinaLCorner) July 21, 2022
Memorizing “pages, lines, and words from favorite books” is one of the more creative but highly memorized methods, and for a Bitcoiner, that means storing the seed phrase in the Harry Potter text. on pages 100 to 112. Which of the eight or more Harry Potter books is anyone’s guess. Fortunately, there are some great ways to remember mnemonics. MTC, a Bitcoin educator who came up with the Sats Leger savings device, came up with a way to memorize a mnemonic phrase through patterns in under 10 seconds.
But what do the experts say about seed phrases? Chris Brooks, founder of cryptocurrency recovery business Crypto Asset Recovery, told Cointelegraph that in his experience, human error can wipe out wealth. People should be more concerned about leaving mnemonics or private keys in paper wallets that could be discarded by mistake than hackers or scammers. Brooks explained:
“You’re much more likely to move to a new apartment and lose your encrypted password in the process than to get hacked.”
The Brooks family behind Crypto Asset Recovery runs a “seasonal business,” as in every bull market, such as 2017 and 2021, crypto enthusiasts who have forgotten their passwords or lost their seed phrases will call out crypto crackers. Sometime in 2021, they told Cointelegraph they were getting as many as 150 customer calls a day. One of their big tips for managing seed phrases is to keep it simple:
“So in general, our security tips are pretty basic. Buy a $30 safe from Amazon, or, you know, build a small wooden box that’s easily recognizable as a place to secure documents and store your helpers there. memorize words.”
They suggest putting the important stuff in that box. That way, whenever “you’re doing spring cleaning or moving, you don’t throw it away. You don’t shred paper or anything like that.”
Related: NFTs, DeFi and Crypto Hackers Abound – Here’s How to Double Your Wallet Security
However, because it’s encrypted, those with physical persuasion may be more inspired to store their mnemonic in some more creative storage “box”. Bitcoin advocates, onthebrinkie 3D prints an adult toy suitable for OpenDime (like Bitcoin’s USB key) or hidden phrases. The inspirational idea is that if an intruder breaks in, they might steal a wooden crate full of important documents, but no one in their right mind will steal a sex toy.