Bitcoins offer the possibility that you can keep them yourself. So you are de facto your own bank. This brings responsibility that you always have to be aware of:
> There is no one who can reset your password for you.
> If you no longer have access to your keys, nobody can help you.
None of this is a problem as long as you take serious care of storing the important data. With today’s wallets, this is also very easy. Most wallets are so-called deterministic wallets. With these, all private keys are derived from a main key, the seed. All generated private keys of these wallets are related to each other and can be recovered with the original seed. Usually, depending on the wallet, 12, 18 or 24 seed words (of a seed phrase) make up the seed. With this seed phrase, the wallet can be restored at will. But beware, whoever has this seed phrase has control over the coins. The backup of this seed phrase must therefore neither be lost nor fall into unauthorized hands.
A good backup must therefore meet various conditions:
It must be protected against unauthorized access.
The recovery just has to work.
It must be discoverable.
It should not become illegible due to external influences.
It must be as immortal as possible.
It must not be dependent on a manufacturer.
In case of death, the relatives need to know how it works and where to find it.
So how do you create a good backup?
If you keep the seed phrase as a whole, you run the risk that whoever gets hold of it will have access to the Bitcoins.
For advanced users, a MultiSig setup or Shamir-Secrets are the safest solutions.
But there is also a simple variant that serves its purpose.
A first idea would be to split the 24-word seed phrase into two different parts, each of 12 words. You then keep one half at home and the other half in a safe deposit box at the bank. That’s not bad, but you can’t lose half.
There is a better variant. You split the words so that you have three backups, each with 16 words, and you can use any two of the three cards to assemble the complete seed. This variant is sometimes controversially discussed on the Internet, but for someone who is looking for a good compromise between simplicity and security, it is very suitable.
These three backups are kept geographically in different locations.
Instead of normal paper, it is better to use the resistant backup cards Shiftcrypto .
Now you are already on the right track with this backup method. However, written paper is only moderately resistant to environmental influences such as fire. If you want to be on the safe side, choose Metal for the seed phrase backup. There are also different products.
A very cheap solution is available in our store.
The best way to keep your backup is to notice if someone has had unauthorized access. Tamper-evident bags are available for this purpose.