Due to the incorrect storage of cryptocurrency wallet passwords, cases of theft of coins are becoming more frequent, and the lack of backup leads to the loss of funds by mistake. To avoid such situations, you must choose one of the methods for reliable storage of keys and backups.
What to store?
Almost any cold local storage has a backup function that you must take advantage of. The backup is an adat or JSON format file. Local wallets such as BitcoinCore issue a wallet.dat file as a backup copy, which is the only key to restore in case of loss of the main password or physical damage to the disk. Local storages must be encrypted, so a cipher is also added to the password list to enter the wallet program.
It turns out that the owner of the cryptocurrency is obliged to reliably protect not only symbolic passwords and addresses but also individual files. Do not forget about two-factor authorization for exchange wallets, which requires the storage of backup QR codes in image format. As a result, a complete list of files for storage can grow to impressive sizes:
- A public key in a 34-character text format (each cryptocurrency may have its own format).
- A 51-character WIF private key is the most important element.
- The password to enter the wallet program.
- Backup in text format or dat, JSON formats.
- A backup copy of the QR code screen for backup of the two-factor authorization program.
First, consider the basic methods for the reliable protection of cryptocurrency passwords.
How to store passwords correctly
The most reliable way is in mind. The human brain is able to remember all the necessary information, including long private keys in WIF format. Unfortunately, no one can guarantee the absence of a failure in neurons or a head injury. In addition, the backup of a digital file cannot be loaded into the brain, although attempts already exist. Memory can let anyone down without exception, so consider the second most reliable way – paper crypto wallet. For convenience, any non-digital type of information storage (engraving on iron, lamination, wood carving, etc.) will be called paper.
Storing passwords on paper is recommended in most cases. The paper eliminates the risks associated with virus software and is great for scammers. Reliability comes at a price. Paper storage does not allow you to copy data, which is why you will have to manually enter a long public and private key.
All necessary data can be written on paper in three formats:
- Natural unencrypted look. The disadvantage is obvious – if secret information is found, the thief gains access to bitcoins.
- Encrypted view.
In order to manually encrypt and remember your private key from the Bitcoin wallet, you can use the trick. We will consider the simplest cipher as an example of a private bitcoin key in the WIF format: 5KjvscgHeMpm484wtkJNrS gACE mckhHJLGFs Vd3 ByK5qZZXj3hS.
Suppose that it is not difficult for a coin holder to remember two pairs of tricks: gAC – nBN; Vd3 – M5d. Then the encrypted private password will look like 5KjvscgHeMpm484wtkJNrS nBN EmckhHJLGFs M5d ByK5qZZXj3hS
This method is considered reliable and everyone can come up with their own easy-to-remember algorithm. The harder it is, the more reliable. Obviously, for such a “coding” of a crypto wallet, one cannot use real words or leave any hints at the location of fraudulent symbols. For example, the insertion of the word back will be noticed instantly, after which brute force (enumeration) of 4 characters will take not so much time and bitcoins will be transferred to the attacker’s account.
5KjvscgHeMpm484wtkJNrSGaCEmckhHJLGFs backy K5qZZXj3hS
Never use words or phrases!
Also, remember that the following characters are not used in the WIF format:
- 0 (zero);
- O (capital letter O);
- l (small L);
- I (large i);
- “\ +” And “/”.
If you add these characters to your encoded private key, the thief will receive a bold hint to guess the password. Another important rule is that each WIF key starts with the number 5, so it should always be left as the first character. It is also not recommended to use logical encoding methods like adding 1 to each digit, replacing letters of the previous alphabetically, etc.
- QR code. The printed QR code is more difficult to encrypt, for which you have to resort to third-party services. In return, the picture gives convenience, since the need to manually enter identifiers disappears.
It is not recommended to use cryptocurrency online key generators. Use only official software.
As a result, the keys necessary for accessing coins are recorded in paper encoded form, but how to store backup files?
How to keep backups
You can restore access to coins in the event of a local wallet hardware failure using the wallet.dat files. The necessary backup file is located at C: \ Users \ YourUserName \ AppData \ Roaming \ Bitcoin. In addition to bitcoin, the path is relevant for other local crypto storages. In case of two-factor authorization on a hot wallet, you need to save a backup of a QR code or secret key.
It is necessary to keep a backup copy on a separate device that never connects to the Internet in order to protect against phishing. The most suitable option is a flash drive.
Next, the owner of the coins must set a password for the archive with the backup. It can be recorded on paper and encrypted using the manual method described above.
As a result of all the actions done, the owner of the coins remembers how to decrypt his password from a paper cryptocurrency wallet. The backup copy is stored on a separate device without access to the Internet and is also encrypted with a password, the decoding method of which is in the owner’s memory.
You can not use manual encoding, then you will have to use third-party programs to encrypt passwords or completely abandon the encoding and hope for the absence of thieves. In this case, all passwords and backups can be stored in two copies on two flash drives without any ciphers.