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Basics of Crypto Security

Risks of backing up your seed phrase on paper.

Paper is inherently vulnerable as a medium for long-term storage of any information - but the risks can be somewhat reduced if you take measures to counteract its weaknesses.

Cryptocurrencies are fueling a fundamental financial shift by allowing individuals to use cryptography to secure their own digital assets. Surprisingly, given the criticality of keeping safe backup copies of the encryption keys that control access to these digital assets, most cryptocurrency holders rely on paper as their chosen medium to back up their cryptocurrency access keys.


Paper backups of seed phrases are subject to a large array of threats, including loss, theft, and destruction.

Relying on paper backups is the leading cause of lost crypto assets.

Even safe deposit boxes may not fully protect paper backups.

Some precautions such as added physical protection, and having an equally-secure copy in a different location, can make paper backups less vulnerable.

Paper is a popular default backup medium because it is convenient for both consumers and wallet manufacturers. The use of paper to back up the all-important "seed phrase," or "private key," was for some years the assumed, de facto backup mechanism described by cryptocurrency wallet manufacturers. In a survey of the 20 top wallets, 18 of them offered only one mechanism to back up the seed phrase: to write it down on a piece of paper and store it securely. The other 2 wallets surveyed also provided a paper backup option, and added the ability to generate an encrypted digital copy to be kept in a location such as a USB device, off-network laptop, or in the Cloud.

If you must write down your seed phrase or private key on paper, please do it temporarily, then use one of these methods to create a reliable backup, and then destroy the temporary paper backup. This article explains why these steps are necessary to preserve your investment.

The weakest link in crypto.

Storing your valuable backup key or seed phrase on a piece of paper carries unique risks for the crypto owner. Paper is delicate, and its threats include:

  • Gradual deterioration of legibility over time
  • Catastrophic destruction due to natural disasters like floods or fire
  • Accidental destruction by insects, animals, or people

Additional threats that are common to nearly all forms of backup include:

  • Loss or misplacement
  • Theft
  • Lack of awareness of backup location to family or heirs

The list of threats can go on and on. While designed with good intentions to protect crypto owners' assets from loss, paper backups actually have become the leading cause of lost crypto assets. Having a paper backup creates a false sense of security, because when an unplanned event causes a loss of the user's main wallet, they realize they do not remember or cannot access the paper backup they thought they had. As the number of cryptocurrency owners grows, this problem, with its devastating losses and resulting customer dissatisfaction with securing cryptocurrency assets, is also growing — with users often directing blame at wallet vendors.

Risks of using Paper backups

Paper backups and wallets are often kept in the same location and are therefore subject to the same risks as the owner's main wallet: fire, natural disasters, burglary, etc.

Casual owners are likely to forget the "secret storage location" of their piece of paper after few years.

In the case of an owner's accidental death, there is no way for their inheritors to recover the assets, which in the case of cryptocurrency keys makes those assets permanently inaccessible.

By nature, paper is not a long-term storage medium, and can easily become unreadable after years through natural wear and tear.

Casual users are confused about the role and function of paper backups and often blame the wallet vendor for any incidents regarding wallet backup and recovery. That creates a significant load of unresolvable cases for customer service and increases customer dissatisfaction with the wallet brand.

In financially-unstable countries where cryptocurrency ownership is crucial, access to bank safe deposit boxes (a common storage location for paper backups) is often restricted during any bank crisis, exactly when users might need immediate access to their crypto-assets.


Beyond restoring cryptocurrency access that may have been lost in a damaged wallet, one of the times when a seed phrase backup is most desperately needed is in the event of inherited crypto assets. Sadly, there have been many instances when the inheritor has been unable to access assets after the owner has passed away, because no one knows about any paper backup copy.

What can be done to reduce risk to Paper Backups?

If a cryptocurrency owner chooses to store their backup seed phrase on paper, they should at a minimum take care to:

  • Ensure that when they wrote the seed phrase down, their writing was not captured on camera, and any underlying pages in a pad were not imprinted from writing pressure.
  • Carefully destroy (for example, by burning) any temporary or interim copies that they may have created while producing a permanent paper copy.
  • Carefully ensure that no electronic copies remain on computers or printers that were used in generating the seed phrase, key, or QR code representation on paper. (This may require expert assistance.)
  • Understand the expected durability of the pen, pencil, or printer ink chosen. (Pencil is often recommended.)
  • Laminate the paper copy with waterproof, fade-proof, high-quality plastic.
  • Ensure physical safety of the backup paper in a vault. Consider keeping a second copy in a separate, equally-secure vault.
  • Let at least one other trusted person know about its existence.

Even if the protections above are followed, paper backups have limited reliability.

A better way.

Some crypto owners will not understand why they can't simply rely on the convenience of recoverable passwords like those used in traditional banking services. In the near future, as more types of transactions occur on blockchain networks, the security levels that we expect for today's cryptocurrency storage will also apply to fully-digital house keys, car keys, real estate titles, and a variety of personal property and documents that are currently secured by cryptographic keys. A better solution is needed to bring security and backup options to consumers at the forefront of this digital economy.

Basics of Crypto Security

Risks of backing up your seed phrase on paper.

Paper is inherently vulnerable as a medium for long-term storage of any information - but the risks can be somewhat reduced if you take measures to counteract its weaknesses.

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Inheritance: Get ready today.

Vault12 Digital Inheritance is the first solution to offer a simple, direct, and secure way to ensure cryptocurrency, NFTs, and other Web3 digital assets can be inherited by future generations.

Digital Inheritance enables investors to designate an individual or a mobile device as a guardian that will inherit their entire portfolio of digital assets (seed phrases,private keys, digital art and other secrets) inside a secure digital Vault once the time comes, eliminating undue risk and the need to continually update an inventory or issue updated instructions which result in privacy leakage.

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Decentralized Self-Custody Backup.

Designed to be used alongside traditional hardware, software, and online wallets, Vault12 helps cryptocurrency owners, professional crypto traders, and high-net-worth investors safeguard their digital assets without storing anything in the cloud or in fact, any one single location. This increases protection and decreases the risks of loss.

(Note: The Vault12 app is not a crypto wallet and does not hold cryptocurrency. It is a Vault that safeguards your wallet seed phrase and private keys, associated files for NFTs, and digital art).

The Vault12 app enables decentralized self-custody back up, and provide legacy inheritance for all your web3 digital assets, including NFTs, wallet seed phrases, secrets like keys, PIN codes, DAO project keys, and digital art.

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Collectors, ensure your Art is protected for the future.

Whether your digital art is suitable for a phone, or represents much higher resolution multimedia, make sure that you have backed up a copy in case the resource link is disrupted in the future. Digital art can easily be added to the Vault either via the mobile app or via the desktop utility. Once you have stored your artwork in your Vault, it will also benefit from inheritance once you activate that in your app.

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Creators, do you have creative security?

As a creator, you can use Vault12 to safeguard not just your NFT and crypto wallets but also your original digital artwork. Project creators will always have to deal with multiple wallets - inventory, treasury, as well as future royalty wallets.

Vault12 safeguards your project assets, increasing protection and decreasing the risks of loss whilst ensuring that everything is ready to be passed onto future generations when the need arises. This is creative security.


Step-by-step guides for setting up your digital Vault and adding assets, recovering assets, inheriting and restoring Vaults. Vault12 Web3 personal security helps you recover, back up, and inherit all assets stored in your Vault including Bitcoin, Ethereum, crypto, private keys, seed phrases, wallets, NFTs and digital art.

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With the latest release of Vault12, now available in both iOS App Store and Google Play we have streamlined how you can use VGT to upgrade your Vault or fund your Vault for future. Right now there is a 50% discount on all plans if you fund your Vault with VGT.

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How to get the Vault12 app, create your own Digital Vault, and assign trusted Guardians to guard your Vault.

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