Financial Education

What Are Seed Phrase Wallets? (5 Tips For Wallet Security)

December 10, 2021

What Is A Seed Phrase Wallet?

Have you ever wondered how you can keep your digital assets secured? Becoming your own bank means becoming your own security… which means single-handedly stopping notorious hackers who behave like sharks who smell blood in the water. The idea of cracking the code of layers of security gives them thrill and excitement. Scary right? 

Cryptocurrency is becoming more recognized than ever, and many people don’t know how to start or how to protect their assets once they’ve dipped their toes into the crypto world. 

There are a lot of wallet types out there with copious security measures, and choosing one over another can be challenging. In this post, we will be examining seed phrase wallets.

So really, what is a seed phrase? 

A seed phrase is a combination of random words that serve as the passcode or private keys to your wallet, and therefore, your crypto.

For example, a vault that has a number combination that must be entered before you can open it, but change the numbers to a series of words which should be input in the way that it was given to you. We are not talking about the typical Hello123! Passcode here--- you will be given 12 to 24 random words that must be written down in succession. These words serve as your private keys - the seed phrase or passcode to your funds. Without this seed phrase, you could lose your funds forever.. 

In the olden days, wallets were using multiple random numbers and words as a code to secure the funds stored inside of them. This process was much more tedious than the system that seed phrase wallets now use. Then almost suddenly, that all changed and the world moved over to using a phrase of 12 common English words.

This system is beautifully created to protect one's hard-earned money, but it goes two ways:

We are provided security phrases, but our duty is to keep them safe and never forget them. If anybody else gets these unique phrases, consider your wallet gone forever! Harsh but true.

For example, there are accounts who may pretend to be an official partner or employee of a certain wallet. Users were told to give their seed phrases for verification...and just after that, the users had to say a heartbreaking goodbye to their assets. There was also an instance where a user thought he was using an official link of the wallet, but sadly the hackers created the website so well that just a period or a number has been changed and it wasn't noticed at all.

Security Tips:

There are countless examples like the one above. So how do you protect your funds from malicious hackers? Here are 5 tips on how to keep your funds safe and secure:

  1. NEVER store your seed phrase digitally. Many people will write them down in their diaries, journals, and store them in their vaults. 
  2. Keep your seed phrase in a place only YOU know the location of.
  3. Encrypt your seed phrase onto a dog tag, locket or a piece of metal (lock it in a safe or vault for additional security).
  4. It is also ideal to get a hard wallet where you can store your crypto assets with a physical device. 
  5. If you have your seed phrase wallet stored via an app on your phone, hide the application on the 2nd or 3rd page of your phone, and use a special email (separate from your normal email) for your crypto accounts.

To each his own, as they say. Whatever works for you to keep it safe, do it. We hope we were able to help clarify how seed phrase wallets work! As long as you take good care of your seed phrase, you’ll have a sweet and safe Defi Journey :D 

If you have any further questions on seed phrase wallets, check our YouTube video here, or write us a message through our in app support chat or at digifox.finance - always happy to help!

GET STARTED
Digifox is an all-in-one finance platform. Earn 50-100x more on your interest, buy crypto, and send money globally.
MORE POSTS

You might also like..