When entering the fast-paced world of crypto, there is the excitement of the market and the groundbreaking technology that powers it. There is much talk about DYOR, “Do Your Own Research,” and “Buying the Dip.”
However, the recovery phrase is an essential, though not-so-glamorous, part of crypto investing, often forgotten by new users.
This article covers why you need a recovery phrase, how it works and how to secure it.
What is a Recovery Phrase & How Does it Work?
A recovery phrase, also known as a mnemonic phrase, is a series of words (usually 12 to 24) randomly generated by the crypto wallet to gain access to your crypto/digital assets held within that wallet.
Once the recovery phrase is verified, you can access your crypto/digital assets. Think of your recovery phrase as the key to your house: just as the key to your house allows you to access your home, a recovery phrase allows you to regain access to your wallet and crypto assets.
Just as you would keep your house key in a safe place, it is essential to do the same with your recovery phrase.
How do I secure my Recovery Phrase?
When the recovery phrase is generated, you must secure it and if you write it down protect that copy as you would any sensitive information. If you were to lose it, you may not gain access to your crypto wallet in most cases.
Please never give out your recovery phrase. Several crypto scams attempt to defraud unsuspecting users out of their crypto. Your crypto wallet service provider will never ask you for your recovery phrase. Giving out your recovery phrase is like giving someone the keys to your house.
You should write down your recovery phrase on paper, and store that paper somewhere safe where it’s accessible only to you. It is not recommended to save your recovery phrase on your phone or store it on a computer because it can be hacked and used to access your crypto.
However, if you choose to store it digitally, be sure to use a password-protected application such as LastPass.
Remember the recovery phrase is for your eyes only. It needs to be written down immediately upon receipt. Do not share it with anyone. It is a good idea to write it down in multiple places.
What happens if I lose my Recovery Phrase?
Generally, if you lose your recovery phrase, it’s very likely that you cannot regain access. With a non-custodial wallet, where you solely hold the private key, you usually cannot restore access without your recovery phrase.
With a custodial wallet, it may be possible to regain access to your wallet if you lose your recovery phrase. However, in many cases, you might not recover your access to your wallet.Download App
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