First things first: a physical metal backup is the best possible protection for sensitive data. It should be independent, analog, and offline.
- Best Practices for Creating a Secure Offline Bitcoin Wallet Backup
- And after you have created a secure backup, what comes next?
- Ensuring Long-Term Security: Regular Check-ups for Your Crypto Backup
A hardware wallet is an electronic device that generates your private keys in order to authorize and sign transactions on chain.
You should always pair your hardware wallet with some kind of physical backup – which means that you should make an offline copy of your private key/seed phrase. You should not keep any spare copies of your seed phrases on pieces of paper, in calendars, in your mobile phone, on a disc or in a cloud, also you should never take photos of your passwords.
Best Practices for Creating a Secure Offline Bitcoin Wallet Backup
Making a backup copy is not complicated but it takes time and requires some concentration. The best practice in self-custody, is to keep the copy of the password on you, and to make sure that it is backed up on a durable medium.
When managing larger investments or assets, it is not wise to entrust their security to just one device. It makes much more sense to spread the possible risk. You don’t have to plan out your entire strategy at the start of your journey, you can develop it gradually as your earnings or savings grow.
And how should I secure all lifetime savings: do I keep them in one place? In one device? And how long can I keep my money there? It is a good idea to think about the quality of the backup copy, about its durability and resilience, and also about an easy access when you need to restore your information.
That’s why, as your next step up, you might consider is using several backups and eventually creating a Shamir Backup.
And after you have created a secure backup, what comes next?
Let’s think for a minute: perhaps you should check-up on it on a regular basis? In particular, if you have your password stored in many capsules. Are all the parts there? Is any of them missing? Has any of them been accidentally lost, just like the one that you keep with your Spanish grandma?
It is really good to verify it. For example it may turn out that you have lost access to 1 of the 5 capsules. don’t worry, you are still safe, you haven’t lost your assets. All you need to do is to modify the shares or to move them by adding 1 missing capsule.
This can be done most conveniently with reusable backups (like Cryptosteel), with a movable tiles system. They can be freely modified if needed. It is a module system, a system of engraved marked letter tiles: all small and capital letters, digits and symbols.
And this is where we enter the verification procedure.
Ensuring Long-Term Security: Regular Check-ups for Your Crypto Backup
You – the User – verify your backup. It is clear and easy to do, because you deal with normal letters of the alphabet, and not with dots encoded as words. If you have your code in the form of abbreviated words, it will be very easy to check. Reading is natural for you, so you will be able to spot a mistake at first glance.
It is best to check it all immediately after backing it up in Cryptosteel. Perform a test restore procedure. Perhaps it is not the most convenient way, but it’s very clear and very safe. In order to make sure that the given seed words are correct, it’s best to do it when you are at ease and not pressed for time. You have the time, the comfort, and full control, there are no risks or threats. In such ideal conditions, you will be able to read back the password from your backup and to check if you can restore your wallet. You can double-check if everything works correctly.
So: you have a piece of paper with the seed words written on, you have the offline metal backup, and so you can perform test restore. Even if a mistake pops up, there’s no stress, all is good. You can track down the mistake and correct it. And this is what matters most: your security and your confidence that everything is in order.
If you happen to lose your hardware wallet, or if it breaks down, relax, you can be at rest, because you know that everything has been carefully checked and works well. Take your time to avoid stress and fear that under pressure something has been encoded incorrectly.
Just remember, your first mistake can make you feel insecure, you may start panicking that it doesn’t work, that it’s the end… If you practice it all in advance and make sure that your setup is ok, you will gain control, confidence and security. After all, the most important thing is to make sure that your password will never be lost, that it is safe, and that you can access it whenever you need to.
A big thank you to Martin for his inspiration!