People who mine, buy, trade, and exchange Bitcoins often keep their crypto savings in special virtual or hardware wallets. These e-wallets are pretty safe, but sometimes bad things happen and the investors and miners can lose access to their wallets or lose the physical device that they use to keep their crypto money.
What is a cryptocurrency wallet?
In order to understand better how to backup and restore your e-wallet, you need to know what a cryptocurrency (in this case Bitcoin) wallet is. It’s a physical device or software service that is used to transfer your earned Bitcoins. You can easily compare it to a bank account or debit card, because you can save what you earned there, without having to withdraw the money.
Every e-wallet contains public and private keys, so you can prove you own it, just like you put your name and address to your bank account. Using the public keys, you can make transactions from one wallet to another. The private keys are helping you to protect the savings and stop possible stealing from your crypto account. According to coinspeaker.com, there are companies that use these e-wallets so they can save and trade with Bitcoins and other cryptocurrencies.
These software or devices are pretty safe and easy to use, but sometimes they are vulnerable and can stop working properly, risking a great loss of your crypto savings. No matter what type of Bitcoin wallet you are using, you need to research how you can do a backup of the data and restore it if something unpleasant happens to it.
Making a Bitcoin wallet backup
Making a crypto backup copy has the same meaning as in the ordinary world. Having a backup means that you can always access your crypto funds and savings. Every e-wallet has a security section you can access from your computer. Next, you need to choose the option “Backup funds” or something similar to it and create a copy, that you can later use to recover your funds.
If it somehow happens that you need to use this copy to recover the savings, you will get a new crypto ID with completely new login details, passwords, and keys. Be sure not to store your phrases online. It’s always better to keep these data offline because if someone finds it, they can access your wallet and use your login credentials to open it. You must follow the instructions on how to create a strong phrase.
What is a wallet phrase?
You can find it under the names of recovery phrase, backup phrase, seed phrase, seed recovery phrase, or backup seed phrase. It’s a list of words that contain the needed information and keys for unlocking and recovering your crypto e-wallet. It works similarly to the card’s PIN code and keeps your Bitcoins safe from stealing. If your device breaks, you can download the same wallet or use the same hardware device and use the seed phrase to restore access.
But, you need to be very careful with this phrase. You must keep it in a safe place and never type it into any website. These seed phrases work with the blockchain funds. The technologies the other crypto networks are using are similar to them, but not the same.
The e-wallet takes a few words from the English dictionary and assigns a number to every one of them. The phrase can be converted into a number combination that keeps the information of keys the user needs to access the Bitcoin wallet. Let the system generate a phrase for you because if you try to do it alone, you can use some recognizable pattern that is easy to hack and access. Also, you can enable two-factor phrases, just like you use two-factor authentication to access some of your online profiles.
According to many cryptocurrency experts, the most practical way of storing this phrase is by writing it down on paper. This may be weird if we know that for the other Internet services writing down the passwords and codes is not a good idea. But, when it comes to keeping your crypto funds safe, word lists can be written down, or even engraved on some piece of metal, knowing that it’s more durable than paper.
You should never store a text file on your desktop that contains the phrases. Also, don’t use the apps and software programs that are used to store your login details for other platforms. Don’t add or erase some words, because as we said, if you try to add words that are meaningful for you, the phrase can easily be hacked.
How to recover your Bitcoin savings?
Sometimes, you may lose your crypto wallet, just like you may lose your real-life one, with all the cash, cards, and personal documents inside of it. It’s a bad feeling, but when you have your backup data, recovering can be an easy task if done properly.
You need to use the recovery seed phrase we explained above and enter it to the new wallet. You also need to “destroy” the old device, or block it using your cloud access. Your old login details and credentials will help you access your Bitcoin funds. Some e-wallets require a lot more steps to prove you are the person who owns that account, but in the end, after you confirm your identity, you can save your savings and continue with mining, investing and trading. Other e-wallet services may provide recovery smart cards with recovery details that are permanently erased after you access the funds.
If you use your hardware wallet or the mobile device you were using, you need to generate a new key, because sometimes our devices keep a lot more data about us than we are aware. There is always a chance for someone to find your old wallet, but if it’s strongly protected, the chances that they will do some harm are pretty small.
We hope you are careful how you keep and store your Bitcoin or other crypto wallets. Even if you are the most responsible and most careful person in the world, you always need to be aware of the risks and keep a backup and recovery data for your e-wallet.