Mastering cryptocurrencies you have to learn a lot. If you already have experience with an online exchange focused on traditional assets, you will find this easier on some points. Let’s say the technical analysis of the dynamics Exchange BNB to ETH The price is based on the same chart patterns.
The basic difference between digital assets and traditional assets lies on a different level. You can control and protect your savings in the way you think is best for you personally. The main aspect of safe keeping of funds is associated with recovery phrase or initial phrase.
Cryptocurrency is the only asset in existence that can be stored without intermediary institutions. This provides huge opportunities, since it is technically very difficult to steal, ban or confiscate capital. But freedom does not mean permission. Freedom is above all responsibility for the consequences of one’s actions.
What does a seed phrase sound like and what is it for?
At the heart of creating a private key for each cryptocurrency you own is a seed phrase. It is a meaningless set of random words, usually 12, 18 or 24. It can be compared to a master key in a hotel, which can unlock any room even if its key is lost.
As long as you remember the initial phrase, losing the device where your coins are stored or forgetting the password is nothing more than an annoying inconvenience. Let’s say you already have a hardware wallet, Trezor or Ledger, and you think it’s best to keep it with you at all times. But one day you are about to go Let’s exchange And suddenly you find that he has disappeared. The searches turned out to be fruitless, and you may have lost it on the way home. And what, now your coins are lost forever?
In fact, not everything is so sad, as long as you have a seed phrase. If you purchased another device with caution, you can restore access immediately. If there is no backup device yet, you will have to buy another one and do the same with a new wallet.
But if you can’t find the seed phrase, your coins will remain forever in the bowels of the blockchain. This is why the mnemonic phrase needs to be secured more than the wallet itself.
How to store your seed phrase securely
First, there are two important things to remember:
Write the mnemonic phrase word for word and in the order in which it appears in the portfolio. A change in word order or a typo is tantamount to mnemonic loss of phrase.
They should not be stored on an electronic medium, especially those connected to the Internet.
And now in more detail. It would seem easier: write a mnemonic phrase on a piece of paper and put it in a file with documents. But to be completely honest: how many of these important notes have I actually lost even outside of force majeure? And how many were thrown away because of the seemingly insignificance of the record? And what do you think, how many chances does a piece of paper on which some nonsense is written have to survive?
Therefore, this record must be kept in a safe place. If you have a large enough amount on your account, and you have a safe in your home, that’s great. The idea of a safe isn’t extravagant either.
But there is another circumstance – the physical properties of the carrier itself. The ink may fade or fade over time until the engraving is completely unreadable. And paper itself is not the most reliable material.
A flash drive as a media option for an initial phrase is generally acceptable, but not desirable. The main difficulty is that it is not connected to an internet connected device. Of course, it is unlikely that hackers intentionally hacked your device specifically, but do not forget about the possibility of infection with non-obvious malware,
Perhaps the most extravagant way to stock the seed phrase is to tattoo it on your body. So you will always be with her and not be lost. But security from prying eyes is very questionable.
In fact, not everything is so sad. The problem of fragility and unreliability of physical media is solved by metal. Some manufacturers include metal plates in the package, some offer them as an optional accessory. Yes, it makes the purchase more expensive, but is it really worth it?
Disclaimer:
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