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Wallets vs Vaults - which are better?
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Vault12 Blog

Wallets vs Vaults - which are better?

What is the difference between Wallets and Vaults? Why you need both Wallets and Vaults for backup and inheritance.


What is the Vault12 app?

The Vault12 app is an intelligent digital vault that knows how to back up and support the inheritance of your digital assets like passwords, PINs, seed phrases, private keys, files associated with your NFTs, and digital artwork. It safeguards basically everything that you know and love in the world of crypto.

What is the difference between a Wallet and a Vault?

One of the questions that we hear a lot is "What's the difference between a wallet and a vault?"

Basically, a wallet is initialized using a seed phrase or a private key, interacts with a blockchain, and allows you to send and receive, buy and sell cryptocurrency. It enables you to sign transactions on the blockchain, authorizing their execution.

So a wallet is used to perform a lot of transactions and interactions with the blockchain.

A Vault, on the other hand, is completely inert. It's completely separate from your blockchain activity. There are no transactions going on. It's simply a place to store valuable things like seed phrases, passwords, private keys, and digital art.

So a Vault is completely different from a wallet.

Why do you need both a wallet and Vault?

There are three reasons that you should have both a wallet and a vault for your digital assets.

  1. The first reason is backups. It's very important that you've backed up your precious assets, whether they're PINs, passwords, seed phrases, or artwork. Everything should have a backup that is available to you should you need to access it.
  2. The second reason is inheritance. It's very easy to lose track of assets that you need to pass on to the next generation. So having a single inventory in one place with all of your digital assets, all of the instructions, PINs, passwords, seed phrases, private keys, and digital artwork that you want to pass on in the case of incapacitation, or when you pass, and having a mechanism to smoothly transfer them is really, really important.
    It's not something you're going to be able to do with a wallet.
  3. The third reason is that centralized custodial services are prone to loss. We've seen this time and time again every year for the last decade. They're subject to fraud. They're subject to hacking. They're subject to companies going bankrupt and people losing all of their assets. In contrast, the Vault12 app provides a distributed self-custody backup.

So if you're interested in having a backup, in having inheritance that works with whatever your trust & estate attorney wants you to do, please, please, please make sure you have a backup, make sure you've created a vault, and that you've downloaded the Vault12 app from vault12.com/download.

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Vault12 Blog

Wallets vs Vaults - which are better?

What is the difference between Wallets and Vaults? Why you need both Wallets and Vaults for backup and inheritance.

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Wasim Ahmad

Wasim is a serial entrepreneur and an advisor in the fields of AI, blockchain, cryptocurrency, and encryption solutions. At Vault12, he led the private and public fundraising efforts and focuses today on expanding the Vault12 ecosystem. His crypto experience began with AlphaPoint, where he worked with the founding team to launch the world's first crypto trading exchanges. Previously he was a founding member of Voltage Security, a spinout from Stanford University, that launched Identity-Based Encryption (IBE), a breakthrough in Public Key Cryptography, and pioneered the use of sophisticated data encryption to protect sensitive data across the world's payment systems. Wasim serves on the board of non-profit, StartOut, and is a Seedcamp and WeWork Labs global mentor.

Wasim graduated with a Bachelor of Science in Physics and French from the University of Sussex.

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Backup and Inheritance for Bitcoin

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You will lose your Bitcoin and other crypto when you die...

You will lose your Bitcoin and other crypto when you die...

...unless you set up Crypto Inheritance Management today.

It's simple—if you don't worry about it, nobody else will—not your software or hardware wallets vendors, not your exchanges, not your wealth managers. So you have to think about how to protect the generational wealth you have created and reduce the risks around passing that wealth on to your family and heirs. What are the challenges with crypto inheritance?

  • Crypto Wallets are difficult to use and do not offer crypto inheritance management. In fact, most of them tell you to write down your seed phrase on a piece of paper which is practically useless.
  • Some people back up their wallet seed phrases or private keys on paper, local devices like hardware wallets or USBs, or in the cloud - all of these options have severe drawbacks from hacking, to accidental loss, to loss of cloud services. No one wants that to happen to their crypto generational wealth.
  • Software wallets operate on specific blockchains, yet your crypto assets span multiple blockchains, for inheritance to work, you must be able to manage inheritance across every blockchain - now and forever.
Vault12 is the pioneer in crypto inheritance management, watch our explainer video or Inheritance demo today.

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Screenshot of Vault12 Guard apps - Add an Asset screen

Crypto Inheritance Management: Get ready today

Vault12 is the pioneer in Crypto Inheritance Management that delivering an easy-to-use and secure method for assigning a legacy contact to your crypto wallets. This enables you to pass on your wallet seed phrases and private keys — including Bitcoin (BTC), Ethereum (ETH) — to future generations. Designed for everyday people, and strong enough for Crypto OGs.

This innovative, decentralized system enables users to appoint a person or mobile device as Guardian. The designated guardian is entrusted to protect the user's comprehensive collection of wallet seed phrases and private keys, safely stored within a decentralized digital Vault. No information is stored on cloud servers, or Vault12 servers and nothing is stored on local devices making it less of a target.

The Decentralized approach reduces points of failure and removes the necessity for regularly revising wallet inventories or modifying instructions for your lawyers, often leading to privacy breaches. It is the best way to preserve crypto generational wealth.

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Screenshot of Vault12 Guard app - Adding data into the Vault

Take the first step and back up your crypto wallets.

Designed to be used alongside traditional hardware and software crypto wallets, Vault12 Guard helps cryptocurrency owners back up their wallet seed phrases and private keys (assets) without storing anything in the cloud or any single location. This increases protection and decreases the risks of loss. Making sure you have an up to date back up is the first step in crypto inheritance management.

The Vault12 Guard app enables secure decentralized backups and provides inheritance for all your seed phrases and private keys across any blockchain, including Bitcoin, Ethereum, ERC-20, and other crypto wallets.

Note: For anyone unfamiliar with cryptocurrencies, Vault12 refers to wallet seed phrases and private keys as assets, crypto assets, and digital assets. The Vault12 Guard app includes a software wallet that works alongside your digital Vault. The primary purpose of this is to guard your Bitcoin (BTC) or Ethereum (ETH) wallet seed phrases, private keys, and other essential data, now and for future generations.

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Add a legacy contact for your crypto.
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