I’ve heard many times that you are supposed to write down a “recovery seed phrase” (a series of English dictionary words) on a piece of paper and store that securely so that you can recover your coins when you inevitably lose access to your wallet.dat.
But doesn’t this defy all logic? If this phrase alone can recover the wallet.dat (which feels like magic to me, but I’ll accept it as the truth), what happens if:
- There is a fire and it burns your coins with the paper?
- A burglar steals the paper and takes your coins?
- The government seizes the paper and takes your coins?
Even if you say “I’ll buy one of those fireproof metal plates where you put in the seed phrase with the little metal letters”, that only protects against the first hazard.
And even if you put the piece of paper (or metal plate) inside a fireproof safe, that only stops (at best) number 1 and 2. The government will not be scared to force-open the safe or make you do it under gunpoint, and there’s your recovery phrase.
And if you put your coins on a hardware wallet and secure that, and still store your seed phrase in your computer, then somebody could grab that remotely through one of the numerous security holes that computers/OSes/software have today, restore the the wallet and take your coins before you ever know.
It seems that storing the recovery phrase ONLY protects against your own clumsiness and hardware dying, but not against all the other serious threats.
I’ve spent so long thinking about every possible method to keep my Bitcoins safe, but I just can’t find a single method which I’m not myself able to quickly poke huge holes through…