When setting up a self-custody wallet, the first step is often to write down a series of English words. Many people simply take a screenshot and move on, unaware that these words are the wallet’s true key.
Related asset: $BTC at 83,562 (24h +0.81%).
▍What Is a Recovery Phrase?
A recovery phrase is usually made up of 12 or 24 English words, generated from a list of 2,048 words according to the BIP-39 standard. Using words instead of a long string of random numbers makes it easier to write down and verify by hand.
A recovery phrase can be used to derive the private keys for all the addresses in a wallet. That makes it more important than any individual private key: whoever has the recovery phrase has access to the entire wallet.
▍A password is not a recovery phrase
The unlock password you set for your wallet is only used to open it on this device. If you switch phones or uninstall and reinstall the app, you’ll need your recovery phrase—not that password—to restore your wallet.
With a self-custody wallet, there’s no such thing as “password recovery”: no central organization holds your keys for you. If you lose your recovery phrase and don’t have another backup, the assets in your wallet are basically gone for good.
▍Some of the most common ways recovery phrases get exposed
Taking a screenshot and saving it to your photo library, uploading it to cloud storage or a cloud notes app, or sending it to your own chat account as a “backup” all put your keys somewhere connected to the internet.
Another common risk is scams: fake customer support agents, counterfeit wallet websites, or pop-ups may ask you to enter your recovery phrase under the pretext of “verification,” “synchronization,” or “claiming an airdrop.”
▍How to store it more securely
Write your recovery phrase by hand on paper and store it offline. For extra security, make another copy and keep it in a separate place. After writing it down, test restoring your wallet with a small amount of assets to make sure you copied it correctly.
Legitimate wallet providers and trading platforms will never ask you for your recovery phrase. Remember that, and you’ll avoid most scams targeting recovery phrases.
▍One last thing
Wallet security ultimately comes down to habits: keep your recovery phrase offline, never share it with anyone, and make sure your backup works. Do these three things and you’ll already avoid most risks. Treat anyone who contacts you claiming to be “customer support” with suspicion—legitimate platforms will never ask for your recovery phrase.
If you found this helpful, save it for later.