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How Important Is Seed-Phrase Security When Using A Crypto Wallet?

How Important Is Seed-Phrase Security When Using A Crypto Wallet?

As a crypto user, a private key is what stands between you and your cryptocurrencies. It is the PIN that gives you access to your bank account. It allows access to your cryptocurrencies, enabling you to send and receive crypto coins to anyone across the globe.

Over the years, many people have either lost or misplaced their private keys resulting in costly losses with no recourse.  For example, James Howells lost his Bitcoin private keys, and it cost him 7,500 Bitcoins (now worth millions of dollars). This is the kind of nightmare that haunts many crypto investors.

However, there is a solution. Using seed-phrase security enables you to recover your funds in case you lose your private key. In this post, we define private keys, seed phrase-security, and the best ways to secure sensitive information.

What is a private key?

A private key is a series of alphanumeric characters that give you access and total control over your cryptocurrencies.  A private key is used to sign transactions to allow you to spend and send your crypto coins to anyone in the world. The security make-up of the private key helps to secure your digital coins from unauthorized access and theft.

Private key info

Source- https://comodosslstore.com/blog/public-key-and-private-key-pair-how-it-works.html

It is important that you keep your private key safe. If you lose your private key or it falls into the wrong hands it is the end of your funds. Without your private key, there is no way of accessing your digital coins. You can’t spend, withdraw, or transfer your cryptocurrencies

There are a number of ways you can securely store your private keys. You can store your private keys on paper wallets or a hardware wallet. You can also store your private keys on mobile wallets, desktop wallets, or web-based wallets.

What is a seed phrase?

The seed phrase is a list of random words (12 or 18 or 24 in number) used to recover your funds in case you lose your wallet’s password or the device where your wallet is installed. It also comes in handy when your wallet is not functional.

The seed phrase is also called recovery key, seed key, and recovery seed.

A seed phrase is usually generated when setting up your crypto wallet. Therefore, it is important you don’t skip this step. Backup systems always come in handy when looking to salvage a dire situation.

Once you have access to your seed phrase, taking a pen and a paper and physically writing it down is the next best step. Memorizing the phrase is not a viable option. Also, never store your seed phrase on platforms that can easily be hacked like Evernote or iOS Notes.

Just like your private key, your seed phrase can give anyone who has it access and control over your funds. That said, your seed-phrase security is as important as private key security. So, how do you keep them safe?

How to secure a seed phrase and private key

There are several ways you can store your seed phrase and private key. You can:

Use a paper wallet

While paper is relatively destructible, it is arguably one of the best ways to store your seed phrase and private key. Physically write down your seed phrase and private key on a piece of paper and store it in a safe and secure location where no one but you has access. You can even laminate the piece of paper to resist water damage and possible tear and wear.

Use metal

Besides paper, you can have your seed phrase and private key engraved on steel plates or other durable metals for enhanced safety. Metals come with more durability when compared to paper wallets.

For example, Cryptosteel is a device that allows you to back up your private key and seed phrase in a fireproof, shockproof, and waterproof manner.

Use a hardware wallet

Hardware wallets like Trezor, Ledger, and Keepkey are in existence to help you securely store your seed phrase and private key. The hardware wallets provide a safer option to store your sensitive data offline. Hackers have no way of accessing your data.

Create extra copies

You can write more than one copy of your seed phrase and private key and store them in different places. In case anything happens like say one copy gets destroyed due to natural disasters, you still have a way of accessing your funds. All is not lost.

Divide your seed phrase into 2-3 parts

You can write the first 4 words on a piece of paper and another 4 words on another piece of paper and keep going till you complete the whole phrase. Each paper can be stored separately such that access to the whole phrase is hard for anyone but you. Remember to number the pieces of paper to avoid altering the sequence.

 Avoid storing a digital copy of your seed phrase or private key

Anything stored online can easily be accessed. The online world is not as safe as many people think. Don’t take a picture, print, or save your seed phrase or private key on a digital platform. A hacker can easily hack your system and access sensitive information.

Final word

By now, it is clear that your private key plays an important role when it comes to the safety of your digital coins. Therefore, the information must always be safe and away from everyone else but you. You already have some ideas of how you can safely store your private keys.

In case you do lose the private key (and mistakes do happen) thanks to seed phrase security, you have an option for easy recovery of your funds. Just remember not to skip the option of requesting for a seed phrase when creating your digital wallet.

 

US Customer now able to Buy Crypto with Credit/Debit Cards

US Customer now able to Buy Crypto with Credit/Debit Cards

Hey everyone, the team has been working hard on-boarding exchanges all over the world. This release will help more people, in more ways, onboard safely and easily into crypto.

We have two new options for CoinSpace users. For users in the we’ve integrated MoonPay which allows users in select countries to buy crypto-assets like BTC, BAT, BCH, BNB, DAI, EOS, ETH, LTS, TrueUSD, USDC, XLM, and XRP with ApplePay and some credit cards.

“We are very excited to partner with Moonpay to offer our users a simple way to purchase cryptocurrencies with fiat money. Coin Wallet is dedicated to making it easier for newbies in the industry to get started, so making crypto available via fiat was a logical next step towards achieving our mission,” commented Jonathan Speigner, Founder & COO of the Coin.Space Wallet.

By partnering with Moonpay, Coin Wallet is advancing in its mission of making cryptocurrencies more accessible. This was also highlighted by Moonpay co-founder and CTO Victor Faramond who commented: “At Moonpay we believe a user-friendly onboarding experience is essential to make cryptocurrencies accessible to everyone. We’re thrilled to partner with CoinSpace to help users top-up their accounts instantly.”

Going forward, CoinSpace will collaborate to continuously improve the fiat-crypto onboarding experience for users. In the near future, CoinSpace are also planning to add support in more countries.

List of supported countries
Australia
Austria
Belgium
Brazil
Bulgaria
Canada
Croatia
Cyprus
Czech Republic
Denmark
Estonia
Finland
France
Germany
Greece
Hong Kong
Hungary
Iceland
Ireland
Italy
Japan
Latvia
Liechtenstein
Lithuania
Luxembourg
Malta
Mexico
Netherlands
Norway
Poland
Portugal
Romania
Russia
Slovakia
Slovenia
South Africa
South Korea
Spain
Sweden
United Kingdom
United States of America (see supported states below)

List of supported US states
Alabama
Alaska
Arizona
Arkansas
California
Colorado
Connecticut
Delaware
District of Columbia
Florida
Georgia
Idaho
Illinois
Maryland
Massachusetts
Michigan
Minnesota
Missouri
Montana
New Hampshire
New Jersey
North Carolina
North Dakota
Ohio
Oregon
Pennsylvania
Puerto Rico
South Carolina
South Dakota
Tennessee
Texas
Vermont
Virginia
Washington
Wisconsin
Wyoming

There are more crypto ATMs than ever, but who actually use them?

There are more crypto ATMs than ever, but who actually use them?

The options for buying Bitcoin and other cryptocurrencies seem to increase on a daily basis. There are digital brokers, peer-to-peer marketplaces and a quickly growing amount of cryptocurrency ATMs.

According to Coin ATM Radar, there are now over 6330 cryptocurrency ATMs globally, spanning 72 different countries. Bitcoin and cryptocurrency trading continues to see a state of flux through 2019 with wild trading volume and price swings.

Yet Cryptocurrency ATM numbers have been exploding with over 2000 new ones added since the start of the year

Crypto ATM install growth

Source https://coinatmradar.com/charts/growth/

That seems quite extraordinary considering the growth of Bitcoin still flatters to deceive. With such a stunning growth of cryptocurrency ATMs, surely people must be using them, and if so, who?

The way in which ATMs are used appears to vary from location to location. In wealthier countries users almost solely use them as a means of buying crypto while economic turmoil results in a helpful way to cash out funds.

Cypto ATM distribution

Source https://coinatmradar.com/charts/growth/

Despite this growth, the facilities are still few and far between for most people. In many innovative cities, you’re still likely to find people using them as a novelty ‘trying it out’ rather than for regular exchanges. Malls and shopping centers have also been installing ATMs in the hope to attract the wealthy, rather than a focus on selling Bitcoin.

America leads the way with over 4300 of 6300 worldwide locations, some way ahead of any other countries. Canada offers around 750 while the UK even fewer at about 300.

Total crypto ATM US

Source https://coinatmradar.com/country/226/bitcoin-atm-united-states/

Reasons for visiting a cryptocurrency ATM vary from place to place explains Matias Goldenhörn to Coindesk.

“In the U.S., clients predominantly use machines to buy bitcoin. In Colombia for example, it’s the other way around, people use the ATM to withdraw cash.”

With inflation rates skyrocketing in both Venezuela and Argentina in recent years, locals are quickly seeing the value of decentralized currency free from government manipulation.

Potential issues with Crypto ATMs

In theory, Cryptocurrency ATMs are quite simple, you put money in and receive coins to your wallet. Or vice versa.

Unfortunately, users have found a number of problems with this method of buying Bitcoin, particularly due to an assortment of scams.

Discussions on Reddit flag up issues with modern ATMs. It seems that integral regulation is turning many people off using these growing numbers of physical exchanges. Once a place for anonymity, a demand of many users, now cryptocurrency ATMs must conduct due diligence on transactions. These regulations are helpful for authorities in stopping illicit activities such as money laundering. Identification and even fingerprints are often required to make a transaction.

As you can imagine, all sorts of scams exist to try and swindle people out of their cryptocurrency. Some are clever, others all too simple. ATMs are a particular focus for criminals as users tend to be uneducated in the world of cryptocurrency, particularly if they are just ‘trying it out’.

Two scams, in particular, have become common, the first is unsuspecting people being tricked into believing they owe money or have missed a bill. Victims are then instructed to use a Bitcoin ATM to quickly pay their debt, sending money to the fraudsters cryptocurrency wallet. Scammers pose as companies looking to settle bills quickly.

In Canada, an even more simple technique has been used with a simple ‘out of order sign’ directing users to deposit funds to the printed QR code instead of their own wallet due to a software upgrade.

Elsewhere, discussions on Reddit flag up some other issues with modern ATMs. It seems that regulation is turning many people off using these growing numbers of physical exchanges. Once a place for anonymity, a demand of many users, now cryptocurrency ATMs must conduct due diligence on transactions. Identification and even fingerprints are often required to make a transaction, destroying any previous anonymity. 

Reddit comments

Source- https://old.reddit.com/r/explainlikeimfive/comments/3ulryj/eli5_why_do_bitcoin_atms_require_a_photo_id_palm/?st=k4jscm3r&sh=5630eb57

IRS focuses on cryptocurrency ATM tax issues

In November 2019, the IRS turned its attention to cryptocurrency ATMs, sighting potential tax issues with the growing number of machines in the US.

The taxman is especially vigilant of compliance as these facilities fall under the same Know Your Customer and Anti-Money Laundering rules as online exchanges.

ATMs have become a particular problem, as anyone, anywhere, can put cash in and get Bitcoin out which creates massive potential for illicit activity.

“If you can walk in, put cash in and get Bitcoin out, obviously we’re interested potentially in the person using the kiosk and what the source of funds is.” discusses IRS Criminal Investigation Chief John Fort.

Using a cryptocurrency ATM safely

It is important to understand how you receive coins from an ATM. It happens in two ways, either you receive them directly to your mobile wallet or printed on a paper wallet directly from the ATM.

As discussed with the scams above, there are some important factors to be vigilant when buying cryptocurrency.

The number 1 rule – only ever send funds to your personal wallet/QR code. If asked to scan another QR code outside of your wallet (e.g. a note stuck to a machine or to pay a bill) it is a scam. There is no reason to ever send coins to a 3rd party wallet or pay a bill, no reputable organization forces customers to pay bills via a cryptocurrency ATM.

If you are processing a large transaction you’ll be required to input your ID, telephone and even fingerprints to verify your identity. Double-check the provider of the service is legitimate, even ask the shop or mall for more information before submitting sensitive data.

Cryptocurrency ATMs make it really quite convenient to buy or sell cryptocurrency. As we’ve discussed in South America, they could be vital to the continued growth of digital assets. Not only can you buy coins using cash but users can also cash out their coins on the go. Of course, where money exists scammers and criminals will look to benefit, so if you are using cryptocurrency ATMs then you should take just as much care as you would with a traditional bank.

 

The first countries to adapt bitcoin will be the ones who flourish the most

The first countries to adapt bitcoin will be the ones who flourish the most

Cryptocurrencies have become a major talking point since they first pierced popular culture in 2017. Going from a relatively unknown, unstable market the current total worth of Bitcoin alone, as of June 2019 reached $41 Billion. This isn’t counting all of the other cryptocurrencies that are currently active in the industry at this time, combining those to the initial figure would give a large amount of value.

From this value, nations who are quick to get behind the growing buzz of cryptocurrencies will be able to profit, through business tax, the jobs the cryptocurrencies will generate and much more. Some nations are already thinking about this and are exploring ways in which they can profit from the cryptocurrency boom.

How Blockchain Has Aided the Boom in Malta’s Economy

There has been much optimism about the economic growth of the small Mediterranean island in recent times, with growth in 2018 settling at 6.2%. This has been further compounded by the release of the European Commission’s annual growth forecasts for 2019, where Malta has appeared at the top of the list, with a growth expectancy of 5.2%. Ireland is the runner up in this aspect with a predicted growth of 4.1%.

 

Real Malta GDP growth

Source- https://ec.europa.eu/info/sites/info/files/economy-finance/ecfin_forecast_winter_07_02_19_mt_en.pdf


One of the reasons for this explosion in economic growth can be attributed to the warm reception of cryptocurrencies in the country. Even other countries known for embracing technological advancements have fallen behind Malta in this aspect.

A big part of the reason for this is due to the passing of ideal legislation surrounding blockchain and cryptocurrencies by the country’s Prime Minister, Joseph Muscat. This embrace of blockchain technology has allowed Malta to lure a number of well-known, sizable cryptocurrency operations onto the country’s shores. For example, BitBay, Zebpay, and Binance have all relocated from their native countries to Malta, so that they can enjoy a more comfortable regulatory environment.

How Blockchain is Permeating Education in Malta

Of course, all of these business ventures in Malta are going to need employees. In local news, Malta Today has quoted the European Commission’s report, stating that the new job opportunities provided by blockchain firms have been a key contributing factor in the nation’s economic resurgence.

Interestingly, there has also been a movement towards initiatives to improve the growing blockchain market in Malta. Led by Oxford University researcher Joshua Broggi, the institution is going to be named Woolf University and will be aimed at offering a wide variety of courses, both on and off-campus. The idea is to offer tuition to people across the world by offering them a series of personalized tutorials that can be flexibly suited to the student.

Interestingly, the university will be run entirely on blockchain technology, to avoid incurring expensive administrative costs through the automation of administrative processes. Furthermore, the security provided by blockchain technology will ensure that the university’s systems and degrees earned through them will be incredibly secure against attackers. These degrees can also be validated using blockchain technology.

Students and staff at the university will sign-in through the use of smart contracts, that will confirm items to the institution, such as attendance and the completion of any assignments by students. Students will also be able to pay their tutors through the blockchain, whilst the university will provide students with micro-credits that can be directly applied to their degree.

Broggi is planning to open five different sites for Woolf University, however, he has stated that due to the welcoming nature of Malta to blockchain technology, it was an obvious first choice. As one would expect, Broggi initially planned to raise funds for the university through an ICO, however, he eventually managed to find enough private finance so that he could avoid making a public offering.

Woolf University has already garnered the attention of a number of professors from well-established, elite universities, such as Oxford, Cambridge, George Mason University, Kings College London, Leipzig University and Kyoto University.

It should come as no surprise that the running of such an institution would also make a contribution to the Maltese economy by creating jobs for lecturers and generating more revenue on the island itself through tuition fees and student living.

The Future Outlook for Blockchain in Malta

Malta is rapidly earning the nickname of “Blockchain Island” due to its more reasonable approach to legislation surrounding blockchain and cryptocurrencies. The island nation is a great example of the potential for countries to make strides in their national economy by being more open-minded with the development of new financial technology and avoiding the usual trap that a lot of countries fall into, where they regulate the market so heavily that it is almost impossible for it to grow.

The figures from the European Commission support this line of thinking and if the development of cryptocurrencies and blockchain goes further in Malta, it won’t be a surprise to see even more companies relocating to the Mediterranean, to avoid overbearing regulation. 

The Importance of Choosing The Right Crypto Wallet

The Importance of Choosing The Right Crypto Wallet

Although cryptocurrencies have existed for more than a decade, their popularity truly blossomed in 2017, bringing thousands of platforms and millions of users to the forefront of finance in the digital age. 

Today, cryptocurrencies serve a seemingly endless number of purposes as they power decentralized platforms, facilitate ecosystem transactions, and, perhaps most prominently, exist as a speculative asset in a market collectively worth more than a quarter-billion dollars

Indeed, Bitcoin, along with dozens of other digital assets, is one of the most notable investment vehicles today, competing, and often winning, against other commodities like stocks, bonds, gold, and oil. 

Despite its burgeoning popularity and profit-making opportunity, cryptocurrencies are still relatively new, which means that it is especially crucial that crypto traders – both those that have been involved in the market from the beginning that those that are just getting initiated – understand the tools of the trade. 

These tools certainly include things like hardware adoption and exchange participation, but every crypto trader needs to start with the right crypto wallet. 

Crypto Wallets 101 

To some extent, understanding a cryptocurrency wallet is as simple as the name implies. Just as people in the past would store their cash in a physical wallet, cryptocurrency users store their tokens in a digital wallet.  However, crypto wallets do more than store money in a digital billfold. They are akin to a bank, a safe deposit box, and a vault all combined into a single service. Simply put, a cryptocurrency wallet is a technology used to store, protect, and share digital assets. 

Because digital assets exist only in code, choosing the right wallet is critical. It’s the digital fortress protecting your assets, and it’s the exchange mechanism that makes crypto trading possible.  What’s more, users have a seemingly endless array of options to choose from. CoinMarketCap reports on more than 2,400 different digital currencies, and each project typically comes with its own wallet service. In addition, there are hundreds of companies offering their own wallet services that are compatible with multiple projects and that adopt different priorities. 

Fundamentally, these services are accessed using a unique address comprised of both a public address and a private keys, but, beyond that, the distinctions are numerous and nuanced.  As “Assurance in a Blockchain World,” a report by big ten accounting firm Deloitte, notes, “While there are several wallet providers, it is important for entities to consider the risks associated with the security of the platform and the availability of the assets.”

In other words, making the right choice is a critical decision point for every crypto trader. 

Understanding the Options 

There are numerous cryptocurrency wallet services, and they each fall into one of five categories. Understanding the purpose and process of each wallet service can help make the selection process easier and more accurate. 

Online Wallets 

Also known as cloud-based wallets, these services are famous for their convenience and usability because of their always-on, always-accessible nature. Unfortunately, what online wallets gain in convenience, they exchange for security.
Online wallets are susceptible to fraud and theft. As a service that is continuously connected to the internet, online wallets face a litany of potential attacks. Also, fake bitcoin wallet scams can be especially prevalent. 

For instance, a 2017 scam related to Bitcoin Gold cost investors $3.2 million, in just one example of how fraudsters are looking to take advantage of cryptocurrency investors. 

Desktop Wallet 

Desktop wallets are wallet applications downloaded directed to a user’s computer. This service is only accessible on the device to which it is installed, making desktop wallets significantly more secure than online wallets. While viruses or malware can still impact desktop wallets, users have much more control over the wallet’s protective status and overall integrity. 

Mobile Wallet 

In today’s mobile-first digital environment, mobile wallets are especially enticing. These services download as smartphone apps. Mobile apps share many of the security features of a desktop app, but they do carry additional risk because of the precarious nature of smartphone security. For instance, if a user loses or breaks the phone, they may be unable to access the crypto assets.

Hardware Wallet 

As the name suggests, hardware wallets use a physical device to store users’ private key. Often, this means that the information is kept on a USB drive that users insert into their computers when they want to exchange tokens online. Hardware wallets are often considered to be one of the safest storage options because they are almost always offline, meaning that bad actors don’t have an opportunity to steal your tokens when you’re not looking.  

Paper Wallet 

Widely considered the most secure approach to cryptocurrency storage, paper wallets are a physical expression of ownership. In this case, the public and private keys are printed on a piece of paper that typically includes a scannable QR code that provides quick access to a crypto wallet. 

Recommendations 

Of course, other distinctions should be considered when choosing a crypto wallet. Most importantly, users should access a service’s reputation and functionality related to security. Certainly, convenience and usability are essential, but if crypto investors lose control of their digital assets, the forever nature of decentralized assets makes it difficult or impossible to recover lost or stolen tokens. 

At the same time, custodial or noncustodial options can be a philosophical and practical distinction for many users. 

Moreover, consider a service’s coin support. Make sure that your wallet selection can support the currencies that you trade most. Having to manage and oversee dozens of different wallets is a hassle and a security vulnerability. As much as possible, bring your business under one roof.

Few decisions will be as important to crypto traders as the wallet service that they select. Don’t make your decision to quickly, and don’t miss an opportunity to explore the ways that Coin Wallet can up your trading game with comprehensive crypto wallet service.