This string of 12 to 24 words is literally the key to your cryptocurrency - learn how to use and protect it
Definition
A repeat phrase (sometimes known as a seed phrase) is a series of words generated by your cryptocurrency wallet that allows you to access the cryptocurrencies associated with that wallet. Think of the wallet as a password manager for encryption and the recovery string as the master password. As long as you have your recovery phrase, you'll have access to all cryptocurrencies associated with the wallet that generated the phrase - even if you delete or lose the wallet
One of the fundamental principles of cryptocurrency is the idea of "self-sovereignty": you must access your cryptocurrency without proving your identity, and you must not rely on a bank or other institution to keep it safe. . The technology that cryptocurrencies like bitcoin and ethereum use to achieve this is blockchain – which both stores and secures your crypto using a peer-to-peer network of computers around the world. How does the blockchain know which cryptocurrency is yours? It uses algorithmically generated password-like codes that only the holder can access. When you first set up a crypto wallet – such as Coinbase Wallet – it creates a set of simple words, which is your refresh phrase (sometimes known as your seed phrase). The wallet also uses the refresh chain to generate private algorithmic keys – allowing you to send or spend your crypto. Think of the wallet as a password manager for cryptocurrencies and the seed set as the master password. The reason for recovery is a string of 12 to 24 simple words (such as "lower", "energy", "dust", "happy", "opera", "stereo", "trash" or "empty") or a numeric password, because long series of numbers are hard for people to remember or even write correctly - imagine how hard it would be to enter a long wifi password. Your recovery phrase will unlock your wallet along with the private keys associated with all cryptocurrencies in the wallet. Since only you know the recovery package, it is of the utmost importance to track it Anyone who has your recovery chain has access to your cryptocurrency. If you delete or lose your wallet without carefully saving your recovery package, you will gain access to your cryptocurrency. (Just tell Stefan Thomas, who lost access to hundreds of millions of dollars worth of Bitcoin.) Read more about setting up a crypto wallet.
When you create a crypto wallet, a recovery kit is automatically generated. A refresh string is a representation of a long string of random numbers – and your wallet uses it to generate private keys that allow you to send and spend your cryptocurrencies. The reason the refresh word is given to you as a word (rather than a long string of random numbers) is because people are better at remembering and stringing together a series of words. However, you don't have to rely on your memory to save your recovery kits. What are the better ways? See the section on securing recovery passwords below. Each refresh phrase is taken from a list of 2,048 simple words. The idea of penalty recovery was widely adopted after Bitcoin Improvement Proposal 39 in 2013, which established a standard for a "deterministic wallet" - which is what most wallets are today - where the recovery set will control all the private keys that are held. wallet. The standard also makes the main wallets compatible with each other: if you want to change wallets, just enter the recovery phrase in the new wallet and your cryptocurrencies will be available there.If you lose or delete your wallet, you can only recreate it with a recovery package. It is very important to protect your recovery package from hackers, phishing attacks or simple loss.
How do you keep your recovery phrase safe?
There are a wide variety of strategies for how best to secure recovery kits, which usually vary based on how much crypto you have and how much you value security vs. comfort. A very effective way to secure your recovery password is to split it between vaults in multiple locations (providing redundancy in case something happens to one of the locations). Of course, this is not very convenient. Some people use special services to engrave recovery words into durable materials such as stainless steel. For many people, a solid approach is to simply write down the recovery package and store copies in more than one safe place. With the mobile version of Coinbase Wallet (which is separate from the main Coinbase app you use to buy or sell cryptocurrencies), you can choose to back up your encrypted recovery phrase to Google Drive or iCloud, which stores an encrypted version of your recovery phrase in the cloud. You should also save a copy of the recovery package in a safe place offline. As long as you have your recovery pack, you have your crypto. If you lose your hardware wallet on a bus or destroy your phone with a software wallet, you won't lose your cryptocurrency - you can enter your recovery phrase in another wallet.
What happens if you lose your recovery phrase?
If you accidentally throw out the scrap of paper your recovery phrase is written on, forget which book you hid it in, or die without passing it on to an heir, you lose access to your crypto. And if someone steals your recovery phrase, your cryptocurrency will remain safely stored on the blockchain, but you (or your heirs) won’t have any way to access it. So keep your recovery phrase safe! If you lose your recovery phrase you lose access to your crypto.
If I want to unmanage my recovery words, are there other options? Sure. When you buy cryptocurrency through Coinbase, you don't need to transfer it to another exchangeInstead, you can choose to keep it in your Coinbase account where Coinbase automatically holds it via a "hosted wallet". As your holdings grow, you'll want to explore the main security options available — including moving some of your crypto from your main Coinbase account to Coinbase Vault, which adds a layer of protection without having to set up a recovery or manage privately. keys. (If you want to use a hybrid method, you can also transfer crypto from a Coinbase wallet to a Coinbase vault and vice versa.) What is the difference between a recovery kit and a private key? Private keys allow you to send or spend a portion of your bitcoins, ethereum, or other cryptocurrencies—they're algorithmically derived from a long set of numbers represented by your seed phrase. Your recovery phrase will give you access to your wallet and all of your wallet's private keys. You can think of a cryptowallet as a password manager for your crypto – if you have your master password (recovery string), you have access to all related cryptocurrencies.
