An independent examiner has revealed shocking details surrounding the inner workings of Celsius – a crypto lender that filed for bankruptcy in July 2022. The examiner claimed that Celsius did not operate by the business model that it presented to customers. He likened it to a Ponzi scheme, much like FTX – a company that happened to have used the same accounting software: QuickBooks. The Truth About CEL Token Per a filing from examiner Shoba Pillay on Tuesday, Celsius had…
How to Store Your Crypto Private Keys or Seed Phrases?
A private key is a secret code that allows users to access and control their cryptocurrency or digital assets. A long string of numbers and letters is generated and stored in a digital wallet. The private key is used to sign transactions, providing a mathematical proof that the transaction comes from the wallet’s owner.
A seed phrase, also known as a recovery phrase or mnemonic phrase, is a set of words used to recover or restore a digital wallet. Seed phrases are usually 12-24 words long and are presented in a specific order. They are generated when a wallet is first created, and it’s used to recreate the private key of a wallet.
How to Store Your Crypto Private Keys or Seed Phrases
It is important to store your private keys or seed phrases in a secure and safe place. Some options for this include:
- Physical storage: This can include writing down the keys or phrases on paper and storing them in a safe or safety deposit box.
- Digital storage: This can include using a password manager or storing the keys or phrases in an encrypted file on your computer or external drive.
- Hardware storage can include using a hardware wallet such as a Trezor or Ledger, a physical device that stores your keys or seed phrases offline.
- Cold storage refers to private keys or seed phrases offline, away from any connected device that can access the internet. This can include writing them down on paper, storing them in a safe or safety deposit box, or storing them on a hardware wallet that is not connected to the internet.
- Multi-sig wallets: This refers to using multiple private keys or seed phrases to control a single wallet. This can add an extra layer of security, as the assets in the wallet can only be accessed if multiple keys or seed phrases are provided.
- Split and distribute: This refers to splitting the seed phrase into multiple parts and storing each part in a different location. This can add an extra layer of security, as the seed phrase can only be reconstructed if all parts are combined.
- Using a combination of the above methods: This can include writing down a copy of the seed phrase and storing it in a safe or safety deposit box, storing a copy of the seed phrase on a hardware wallet, and storing a copy of the seed phrase in a password manager.
No matter what method you choose, you need to ensure that the storage location is secure and that you have multiple backups of your keys or seed phrases in case of loss or damage.
Crypto Private Keys vs. Seed Phrases
Private keys and seed phrases are both used to access and control digital assets such as cryptocurrency, but they serve slightly different purposes and have some key differences:
- A private key is a long string of numbers and letters generated and stored in a digital wallet. It is used to sign transactions, providing a mathematical proof that it comes from the wallet’s owner. Private keys must be kept secret and secure, as anyone with a private key can control the associated assets.
- A seed phrase, also known as a recovery phrase or mnemonic phrase, is a set of words used to recover or restore a digital wallet. It is usually 12-24 words long and is presented in a specific order. Seed phrases are intended to be written down and stored in a safe place, as they can be used to recreate the private key of a wallet, allowing the user to regain access to their digital assets in case they lose their device or forget their password.
Private keys are the actual keys that allow you to access and control your digital assets. Seed phrases are used to recreate the private key and therefore allow you to regain access to your digital assets if you lose access to your private key.
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