As you may know, cryptocurrencies are stored in digital wallets. These wallets are accessed using a set of public and private keys. Public keys are like usernames and private keys are like passwords. Both are a string of numbers and letters that allow investors to access their wallets and perform crypto transactions.
There are two types of wallets: custodian and non-custodial. In the case of a custodial wallet, the platform hosting the wallet has a copy of the private key. Therefore, if you lose or forget the private key, you can contact the hosting platform and recover the account by providing some additional details.
However, in the case of a noncustodial wallet, only you have access to the private key. This could be a problem if you lose or forget your private key. Therefore, non-custodial wallets have a second layer of security known as the recovery phrase. It is also known as the “start phrase” or the “mnemonic phrase”.
This article explains what a recovery phrase is and how you can protect it.
What is a cryptographic recovery phrase?
A recovery phrase is a string of 12 to 24 simple words. It is generated when you configure your wallet. This string of words is then used to create your public and private keys. The recovery phrase can be used to complete transactions, claim ownership of your crypto assets, and recover your wallet if it becomes inaccessible.
Each recovery phrase is derived from a fixed list of 2,048 simple words. This allows the crypto to be interconvertible. If you ever want to switch crypto wallets, all you have to do is download the second wallet and insert your private key/recovery phrase. Simple words are used to reduce the risk of human error when writing the recovery phrase.
Here are some things to know about your recovery phrase:
As you might have already guessed, your recovery phrase is extremely important. If you lose access to your wallet, a recovery phrase can work wonders to get it back up and running. However, there are some things you need to keep in mind about this string of simple words:
• You only see this phrase once during the account setup step, so be sure to save it before proceeding to the next step.
• Also make sure you save it in the correct order as word order is very important.
• Never share your recovery phrase with anyone.
• You cannot access your account without your recovery phrase.
How do I store recovery phrases?
If you lose access to your recovery phrase, you will not be able to regain control of your wallet. Therefore, securely storing your recovery phrase is of paramount importance.
Let’s discuss all the easy ways one can use to store his recovery phrases:
• Write it down somewhere, make sure you always have access to it and that other people don’t find out.
• Divide the recovery phrase into several parts and store them in several places.
• Most wallets offer a feature to save the encrypted version of your recovery phrase to iCloud or Google Drive.
• You can also opt for password managers.
• Many people go so far as to engrave it on a metal plate and bury it.