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 AppAbout Abra
Established in 2014, Abra is on a mission to create a simple and honest platform that enables millions of cryptocurrency holders to maximize the potential of their assets. Abra enables both individuals and businesses to safely and securely buy, trade, and borrow against cryptocurrencies – all in one place. Abra’s vision is an open, global financial system that is easily accessible to everyone.
Why Abra
Based in the United States, Abra is available in over 150 countries and makes it easy to convert between crypto and a wide variety of local fiat currencies. With over 2MM customers, $7B in transactions processed, and $1.5B in assets under management, Abra continues to grow rapidly. Abra is widely loved and trusted – in April 2022, pymnts.com reviewed and rated Abra amongst the top 5 most popular crypto wallets in the market. Abra is backed by top-tier investors such as American Express Ventures and First Round Capital.
How Abra Protects Your Funds
Abra places clients’ financial objectives and security first. Abra practices a culture of risk management across all levels and functions within the organization.
Abra employs a state-of-the-art enterprise risk management framework that comprises a comprehensive set of policies, procedures, and practices detailing all applicable risk-related objectives and constraints for the entirety of the business. Abra has instituted a complete set of requisite systems and controls that continuously enforce these policies, procedures, and practices to manage all operations, including credit and lending. Abra’s independent Risk Committee comprises experienced compliance, risk, securities, and fraud operations professionals with backgrounds in industries ranging from traditional and digital assets banking, payments, remittance, to fintech.
Please visit our FAQ to learn more.
