Don’t talk to your crypto wallet!
Advice to heart using crypto wallets
Everyone who works with crypto assets today understands the need of storing assets in one’s own crypto wallet. Only in this manner are the assets safeguarded from unanticipated events such as the FTX meltdown in 2022 or the current erratic payout stops by Binance.
This makes it all the more important to take a few crucial advices to heart when choosing and setting up a wallet:
- When evaluating a wallet, pay attention to the user community on Twitter. The higher the followers, the higher the reputation of the project.
- Advanced wallets offer 2-key support with an emergency kit that does not require a seed phrase.
- Take care of your privacy. For example, the most popular wallet, Metamask, captures user data that may be shared with third parties.
- Especially in institutional applications, it can be important that transactions have to be confirmed by two parties. In this case, the wallet must support “muti-signature” (multisig).
- If a wallet has a seed phrase, seek for wallets with at least 24 words in the mnemonic seed phrase. Given today’s technology, wallets with only 12 words can be easily compromised.
- The mnemonic seed phrase has no place in a password safe or, worse, in a Word document. Write the seed phrase on paper in the traditional way, without speaking the words, because smartphones and desktop computers frequently listen in. Make one or two sealed copies of the paper and place them in a secure location (parents’ locker, safe, etc.).
If you made a mistake with your seed phrase or did not follow the instructions correctly, the open-source project BTCRecover may be able to assist you.
Remarks
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About the author
Ralf Emanuel is a passionate entrepreneur. He founded two companies in the IT industry after managing large-scale IT projects since 1995. After developing and operating several critical enterprise applications in the tourism and finance sectors, he now specializes in IT consulting, focusing on digital transformation, cybersecurity, and blockchain while advising companies on their strategic direction.
