Backing up your Bitcoin wallet is one of the most important financial decisions you can make.
Nobody wants to be this man, begging the authorities for permission to dig through a landfill for a hard drive with thousands of Bitcoin on it:
No matter whether you use:
… there will always be a seed phrase to remember and having a spare copy can make all the difference.
There are, however, some useful guidelines to follow when backing up your Bitcoin wallet. These will ensure that you have access to the coins when you need them, and only you will have access to them.
When you first create a Bitcoin wallet the wallet provider will display a 12 or 24 word seed phrase that you need to write down.
Some wallets, like Electrum, will allow you to see the seed phrase at any time even after you’ve created the wallet.
Other wallets, like a Ledger, will only display the seed phrase upon initialization and never again.
It’s good protocol to always write down the seed phrase as the wallet displays it, but with hardware wallets it’s imperative to do so.
When the wallet shows you the seed phrase, be sure to write it down with a pen.
Never, ever store a seed phrase on your computer in any format, not in an email or in an encrypted RAR file.
Also, never take a picture of your seed phrase with your cellphone.
For maximum security the seed phrase should be 100% analogue. Don’t even use a copy machine to make duplicates, copy the seed phrase by hand. A little bit of paranoia now can save you a lot of anguish later.
Unlike paper, a steel backup wallet is impervious to:
The manufacturers of the Billfodl claim that it’s able to withstand double the average temperature of a house fire. As the Billfodl uses marine steal it’s also resistant to rust, making it the ideal wallet to tuck away for years without ever worrying that it will rust.
Admittedly a Billfodl, at $80 per wallet, is expensive if you have small amounts of crypto and unfortunately it can only store a single backup key.
Make sure that your backup phrase is stored in redundant locations, ideally locations with some physical distance between them.
Depending on where you live in the country a tornado, forest fire, massive flood, earthquake or hurricane should not be able to wipe out all your wallet backups in one go.
If you’re a dedicated hodler and plan to keep your Bitcoin for the long term, you should consider everything that might go wrong in the next decade.
When the Winklevoss twins wanted to back up their Bitcoin holdings, they distributed seed phrases to bank vaults all across the country . Speaking of bank vaults, despite what the Winklevoss twins did it’s actually not such a good idea to store your seed phrase in a bank.
It turns out that safety deposit box holders have very little recourse in the event that the contents of their drawer are stolen. In fact, there are very few guarantees at all for safety box deposits and certainly no $250,000 FDIC insurance.
An encrypted thumb drive with the seed phrase on it might be appropriate for a security box, but it certainly shouldn’t be the only Bitcoin wallet backup that you have.
Finally, don’t brag about your Bitcoin holdings. Although people who’ve been in crypto for a while love to joke about buying Bitcoin being the fastest way to go broke, there remains a certain public perception that people who hold crypto have some degree of wealth.
That perception can lead to all sorts of robbery attempts, some downright barbaric.
Not that such a thing is likely to ever happen, but it’s generally a good idea to practice some discretion.
Nobody anticipates losing their hardware wallet, or their house burning down, or any number of other things that could deprive you of your Bitcoin holdings.
But these things happen and if you don’t have a backup of your private key or seed phrase you can kiss that crypto goodbye.
If you’ve no other backup at the moment, write down your seed phrase on several pieces of paper and store them in separate locations.
Your future self will thank you.