How to Back Up Your Bitcoin Wallet: Best Practices for Maximum Security

As losing your private keys and recovery phrase means losing your bitcoin for good, it’s essential to learn how to minimize these risks.  

This guide takes you through the best practices you can adopt to secure and safeguard your Bitcoin wallet’s seed phrase, so that your wallet can be easily recovered if a need arises.

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Why Should You Back Up Your Bitcoin Wallet?

You should back up your Bitcoin wallet to make sure you can recover it and access your private keys in case you can’t use your wallet for whatever reason.

Your private keys aren’t only the proof of ownership you have, they are also the only tool that allows you to spend your bitcoin. If you lose them, there isn't anyone else who can regenerate private keys for you. 

Meanwhile, your wallet manages private keys for you, and if you lose access to your software or hardware wallet, a seed phrase comes to the rescue as it allows you to recover access to your wallet with all the private keys in it. 

All that means is that if your wallet is damaged, stolen, or destroyed, and you don't have a solid seed phrase backup, your assets are gone permanently. That’s what it’s essential to always back up your Bitcoin wallet. 

Best Practices for Securing Your Bitcoin Wallet

Now, let’s take a look at the best practices you need to adopt as a bitcoin holder. 

Keep Your Recovery Phrase Offline

If you want to secure your bitcoin, it’s never a good idea to back up your wallet in digital form, and that includes photos, files in the cloud, notes, and email. 

Anything that is online can easily be compromised. 

Therefore, the most common option to back up your wallet is to store your seed phrase in a physical form, such as on a piece of paper or, ideally, on a metal plate.

Also, if you have a passphrase, in addition to your seed phrase, have it stored separately. One phrase, one location, and that means finding one won’t give access to the wallet without the other.

Make Redundant Backups in Multiple Locations

If your recovery phrase or private key file exists in only one copy, any unexpected event can mean permanent loss. That’s why you should follow the 3-2-1 rule: multiple copies, different media, and separate locations.

Keep at least two physical copies in different locations. 

For example, one at home and one in a safe deposit box. Use combinations like metal plus paper, paper plus encrypted USB, or a fireproof safe plus an offline, encrypted flash drive.

If you move your funds to another wallet with a different seed phrase, update the backup too.

Consider Using a Multisig Setup

Multisig requires multiple keys to send funds from a wallet. For example, in a 2-of-3 setup, at least two of the three keys are needed to sign a transaction.

Multisig is also useful when funds are managed by multiple people, such as in a family, business, or trust. 

This is a great setup as an inheritance plan as well. If one person loses access, others can still sign transactions. If one key is compromised, the others keep the funds secure. 

However, securing a multisig wallet is a more complex task as you need to secure more seed phrases. In either case, a Bitcoin consultancy might help make your multisig setup even more secure by taking care of lesser-known technical aspects such as wallet descriptors, which make your wallet backup even more reliable.

Test Your Backup Recovery Process

Having a recovery phrase doesn’t guarantee it will work when needed. Test it in advance before your first significant transaction. 

Try restoring the wallet on another device. This confirms the phrase is accurate, the word order is correct, and the backup works. 

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What Are the Most Common Backup Mistakes to Avoid?

Losses can happen not only from a lack of backup but from poor backup practices. Let’s take a look at the mistakes that render backups useless.

Disclosing Your Recovery Phrase Online

Google Docs, phone notes, digital pictures, and other online services are vulnerable. They can be compromised through phishing, hacking, or leaked authorization tokens. Leaks may also occur via browser backups and cloud photo sync.

Remember that anything ever stored online is not secure. 

Even “hidden” or “password-protected” notes on your iPhone are not foolproof. Your recovery phrase should always exist only offline.

Writing Your Recovery Phrase in One Place Only

Make at least two copies of your seed phrase and never store them together. 

Keeping copies in different locations reduces risk. One can stay home, the other in a safe deposit box, or even with someone you trust. To enhance protection, use metal backups.

Revealing Your Backup Details

Revealing your seed phrase or your backup setup even once puts your funds at risk. 

Fake tech support and messages claiming to be from a hardware wallet manufacturer and urging you to implement “security updates” are classic social engineering tactics.

Clicking on Unknown Links

Phishing links and fake wallet interfaces are common tools used by scammers to access your keys. The goal is always to trick you into giving access to your wallet by entering your seed phrase or via other means in order to steal your BTC.

While always staying vigilant, for extra security, you can also use a phishing blocker in your browser or a VPN, and always make sure you are visiting the official website of whatever Bitcoin service you are using.

Also, be careful with clicking email links, even if they appear to be from official support. You can hover your mouse over the link to check whether it’s genuine. 

When there is a need, import your wallet only through sites you have verified yourself. Last but not least, avoid trusting pop-ups, banners, “airdrop checks,” and “wallet connect” on unfamiliar URLs.

Relying on Memory Alone

While memorizing a recovery phrase as part of self-custody of BTC might seem like a good idea at first, it introduces some extra risks. 

The most obvious one is that you can simply forget your seed phrase, mix up the words, or how they’re ordered. 

Also, avoid very complex backup setups, as you might simply forget them as well. Another risk is more complicated, because, in case of a physical attack, you would be able to tell your seed phrase to the attacker, but, at the same time, it might save you as well. 

So you need to consider as many potential risks as possible, even if they look like something from the sci-fi world, such as technologies allowing turning brainwaves into text.

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Get Personalized Bitcoin Wallet Solutions With The Bitcoin Way

If you want to put a reliable Bitcoin wallet backup in place, it’s best to consult professionals who have built the capacity over time to avoid mistakes and oversights.

The Bitcoin Way provides personalized guidance, from choosing and setting up a hardware wallet to building a reliable backup plan.

Start your path to full security by booking a free 30-minute consultation with our team of experts.

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FAQs

How do I back up my Bitcoin wallet?

The minimum you can do to back up your Bitcoin wallet is to write down your seed phrase on a piece of paper and securely store it offline. Even better, make multiple copies and keep them in secure, separate locations on different storage media such as paper and metal. It also helps to test your wallet recovery to ensure the backup works.

How can I make my wallet more secure?

Besides using a non-custodial wallet, to make it even more secure, solutions such as two-factor authentication and a passphrase can help protect it from unauthorized access. But you need to be aware of related risks as well. For example, if you lose your passphrase, you won’t be able to access your wallet even if you still have your seed phrase. Also, consider a multisig setup to protect your wallet even more.

How do I make sure I never lose my wallet?

To reduce the risks of losing your wallet, create multiple backups of your recovery phrase and store them in separate secure locations on different storage media. Update your backups whenever you change your wallet, and always test the recovery process. Do not rely on memory only.

How do I keep my wallet safe?

To keep your wallet safe, make sure only you can access it and prepare a solid backup plan. You can improve your security, for example, by avoiding public Wi-Fis when using your wallet and never entering seed phrases on third-party sites. 

Be cautious with suspicious links, as they are a common method of theft. For more security practices, feel free to talk to a Bitcoin consultancy, such as The Bitcoin Way.

What is the best practice for backing up your wallet?

The best practice for backing up your wallet depends on your needs, abilities, and the size of the funds you want to secure. Generally, Bitcoin wallet backups are variations of different ways of securing your seed phrase. 

For example, you can follow the 3-2-1 rule by making three copies of your recovery phrase, using two different types of storage, and keeping at least one copy in a separate location. Also, store your seed phrase offline only; no photos, cloud storage, or digital notes.