OVERVIEW BACKUP SECURITY TIPS
To protect your cryptocurrency from accidental loss (i.e. your fault, not a hacker’s), you need to back up your Secret codes. Your Secret codes are stored in your cryptocurrency wallet(s). Those codes need to backed up by storing copies somewhere else, such as written on paper, stored in an encrypted computer disk file, or on a USB stick, or DVD, etc. Some types of wallets need to backed up frequently. Other types of wallets only need to be backed up once. Follow these backup security tips to be sure you are making your backups safely.
This back up frequency depends on if your wallet uses a Seed phrase, or not. Seed-based wallets only need to be backed up the first time that the wallet’s Seed is created. Below you will find backup security tips to keep you safer while you are making these backups.
Wallets which don’t use a Seed should be backed up every time a new private key is created (which could be very frequently, potentially for every single transaction you make). You could back up these types of wallets less frequently if you choose, but you risk losing your more recent keys and related funds if something were to happen to your wallet between backups.
Backups ensure that you do not lose your Secret codes, but they also expose you to additional avenues of theft. The more backups you have, then the more opportunities that a thief has to find them. That is why backups should, whenever possible, be encrypted with their own unique code.
STANDARD BACKUP SECURITY TIPS
To protect your funds, follow these fairly standard backup security tips:
- FREQUENTLY: Backup your Private keys as frequently as necessary. For Seed based wallets, you only need to back up each wallet’s Seed one time when it is created the first time you create your wallet(s). For Seedless wallets, you SHOULD back up each new private key which is created for each new transaction.
- ON PAPER: You can make these backups by writing your Secret codes down on a piece of paper. If you do it this way then be sure to hide the paper where it will not be discovered, lost, nor destroyed by fire, floods, animals, …. Consider storing this backup in a very good home safe, or a bank safe deposit box. Backing up a “seedless” wallet on paper can be very daunting since you might have many Secret codes which change frequently.
- WITH PRINTER: If you are printing your backup (rather than handwriting) then make sure to check all of our cryptocurrency Paper wallet security tips.
- ELECTRONICALLY: You can also backup your Secret codes electronically, such as in a file in your computer, or USB memory, or external hard drive, to your cloud, etc.
- ON USB: If you back up to a USB memory stick then you can bypass storing them on your computer hard disk, where they would have been more accessible to a hacker. When you are not actively using this backup USB device, then remove it from your computer.
- NOT FOREVER: Remember that no electronic device backups can be ensured to last forever. Computer disks, USB memory, DVDs, can all become corrupted so you might want to consider backing up to more then one electronic device at a time – especially if you plan to keep the backups for many years. For this concern, an ENCRYPTED cloud backup is actually safer.
- ENCRYPT IT: If you back up electronically then you should strongly consider storing your backup in an encrypted file format. This can be called a “Keystore” file. An encrypted backup file will require a password to open rather than just having your Secret codes exposed to anyone who finds the file. Most wallets will give you the option of generating this encrypted backup.
- USING CLOUD: Although you may not choose to encrypt your codes which are backed up your computer, you should never ever ever save your Secret codes in an unencrypted file in the cloud (i.e. don’t save unencrypted files in Google Drive, nor Dropbox, nor others). You might not even realize (or forget) that you have stored your file somewhere that will be backed up to the cloud. Even though all cloud services use encryption for communication these days you still can’t be sure if they adequately protect your files on their cloud server computers. For example, Dropbox was hacked big time a few years ago. If you do plan to store your *encrypted* backup file to the cloud, then consider using a cloud service whose mission is security. Such as Spider Oak Backup
- DISCARD HARDRIVE: Be careful when you throw away and/or give away your old computer or hard drive – including memory cards, USB flash drives, DVDs,… Make sure that you have copied all of your Secret codes and/or backups from the discarded drives. Multi-millions of dollars of bitcoin have been lost by owners who forgot that the only copy of their Secret codes was on their discarded/donated hard drives.
ADVANCED BACKUP SECURITY TIPS
The following advanced backup security tips are for those who want additional security and are willing to put in extra effort to get it. These tips may also address more rare, fringe issues.
- MULTIPLE COPIES: Make additional (encrypted) backups of your Secret codes and store them somewhere physically distant from your original backup is. One backup could be on a USB stick and a second backup on paper. One back up can be in your house and other in your bank vault. If something catastrophic destroys your computer and backup then you want your other copy in a remote location. Remember that your house could burn down and take every backup with it.
- DIGITAL SHREDDER: Make sure that all Secret codes on discarded hard drives can never be read again. You can either use a digital document shredder and/or physically destroy discarded drives. A typical computer “delete” does not destroy your file, it really only hides it and allows its space to be reused at a later time. Also, reformatting the drive also won’t completely destroy the data unless it is specifically designed to do so. A digital shredder will write random ones and zeros, multiple times, to the memory space where the file was stored ensuring that it can never be resurrected by even a skilled hacker. If you use a digital shredder then consider shredding the entire discarded drive rather than trying to shred selective files since you may overlook something important. If you don’t ensure that your keys can never be extracted from your old drive then they could still be discovered years down the road.
See all of our cryptocurrency security tips.
In the comments below, you can add your own tips, and/or correct or dispute our tips.