How To Backup Your Cryptocurrency Wallet Keys
Cryptocurrency wallets are very useful for storing your precious funds but they are often an ideal target for cybercriminals, as well as the possibility of device loss or server failure. When any of these events occur, you are at risk of losing your crypto funds. This is why it is so important to back up your wallet keys (which are proof that the cryptocurrency account belongs to you and is necessary to recover the wallet).
But you can prevent this from happening by backing up your cryptocurrency
wallet keys. How can you do that?
What is a digital currency wallet?
It is software or an application that runs on smartphones, computers, or a standalone physical device, and allows storing, sending, and receiving cryptocurrencies such as Bitcoin. Some cryptocurrency wallets are for one type of currency, while others can be used to store multiple types. The first cryptocurrency wallet was introduced by the person or group who calls themselves Satoshi Nakamoto when creating Bitcoin in 2009.
How does a cryptocurrency wallet work?
Financial transactions using cryptocurrencies occur within a network of Blockchains using public and private keys. These keys can be likened to your bank account number and internet banking account login information, respectively. The public key is shared with other users to receive coins from them. The private key is what gives the user access to their cryptocurrencies that are permanently stored within the Blockchain. The cryptocurrency wallet generates public and private keys for its user and interacts with the Blockchain to display the amount of cryptocurrency they own. It is the link between the user and their cryptocurrency.
What are the types of cryptocurrency wallet?
*. Hot Wallets: These are wallets that require an always-on connection to the Internet and the Blockchain network, and store the private key of the user’s coins within the always-on application.
*. Cold Wallets: These are wallets that do not require an internet connection, where the private key of the user’s currencies is stored locally and more securely away from the Internet.
But how do you backup your cryptocurrency wallet keys?
1. Use the initial phrase
The seed phrase works similarly to a traditional password but is much longer. It consists of a set of words (usually between 12 and 24 words in length) and is unique to each user. It’s not a sentence, but a random mix of different words (eg toe, square, contact, cricket, etc.), making it virtually impossible to predict or guess. Your seed phrase will ensure that anything associated with it can be accessed, including your keys.
But be very careful here. The initial phrase such as social network or email passwords cannot be changed. It is designed to remain incredibly secure as an unchanged default backup password for your cryptocurrency accounts. So make sure you keep this phrase very safe once it is given to you. It’s also a good idea to split the initial phrase into two or more parts so that it isn’t stolen entirely.
2. Export your keys
It is always a good idea to export your private keys to an external location. However, it’s important to note that exporting the keys will display them as clear, legible text, making them handy for cybercriminals if your device or account is attacked, or recognizable by individuals in your vicinity when displayed on screen (so be sure to check this out). You must perform the export when you are alone in a private area).
However, exporting your private keys to an alternate location means they are backed up and accessible in case of an emergency. Just make sure that you are exporting it to an important device or virtual location and that it is protected after exporting it.
The process of exporting keys differs depending on the wallet you are using, so it is best to go to the wallet provider’s website and check the FAQ section or simply do a search on how to export keys from your chosen wallet via a search engine. It’s not a very difficult process, anyway, so give it a try if you know you have a secure placement ready for your keys.
3. Backup the wallet file
When you back up your cryptocurrency wallet file, the private keys will be backed up with it, making it a viable default backup option. Again, this should be done while alone and never in public.
You can back up your wallet file by copying the master key to a text file and backing it up on a separate device. Alternatively, you can generate a unique QR code to store your master key and then print it, making it a form of physical backup (which we’ll discuss later).
You can also store a QR code on a device, but be aware that this makes it more vulnerable to malware and theft. If you want to store your wallet file or QR code on a device, try an app designed for that purpose, not just a notes app.
4. Physical backup
This is probably the simplest backup method, as you don’t need any technical knowledge to do it. An actual backup involves using a non-virtual device or object, such as a piece of paper or a flash drive, to back up your private keys.
The great thing about this method is that it helps you avoid your keys being stolen by cybercriminals or losing them due to a server crash or downtime. However, you have to be careful as to which option you’ll use to actually backup your keys to it. For example, a piece of paper can be easily found or accessed if not kept in a safe place (or accidentally destroyed), and a flash drive is easy to lose (or physically stolen).
If you want your keys to be physically backed up like this, make sure you have a very secure location, such as a secure or hidden container, that no one else knows about. This way, you can safely back up your keys without worrying about them disappearing.
Additional backup methods for cryptocurrency wallet keys
There are a couple more ways to back up your private keys, but they’re not as secure or easy as the suggestions above, so we recommend looking at the first five options first.
The first of these methods is to communicate with a trusted person. You can tell someone your private key, ensuring that they are never written down, physically or virtually, in the backup process. However, you risk the trusted person losing the key(s) by forgetting it.
Another, less common form of private key backup is cryptographic art (such as NFT). This ensures that your key is unconventionally hidden, which cybercriminals are unlikely to think of. However, this technology is very new and not easy to do either. But it can provide a super secure and obscure way to hide your private wallet keys.
It should also be noted that we do not recommend storing your private keys, seed phrases in a password manager app, as it can be hacked by cybercriminals. Like any other application, they are prone to crashes or server crashes. However, if you absolutely must use such an app, try an option that is highly regarded and recommended, such as NordPass, Dashlane, or Keeper.
If you want to keep your cryptocurrency safe, your wallet needs to be backed up
While it is easy to think that cryptocurrency wallets are designed to be secure, they are never completely secure and as such they need to be protected as much as possible. Backups are a great option for ensuring that you always have access to your cryptocurrency at any time, whether in a hack or in case of oblivion. So give one or more of these methods some use, and know that your money won’t disappear unexpectedly. Check out the best cryptocurrency wallets to store your cryptocurrency assets now.