One Step Ahead
4 min read – Feb 9, 2022
If you are reading this article, you are already one step ahead by thinking about securing your digital assets smartly and safely.
Likely, you are here because you own Bitcoin or other cryptocurrencies. Perhaps you think a lot about how to protect your coins. We will break down the best way to keep your assets safe and make sure you are unlikely to lose your passwords, private keys, or mnemonic phrases from a single event and yet still keep them safe.
Not your keys, not your crypto
Before we dive into explaining the best way to protect your access/recovery information, I will need to ensure you keep your coins in the right place.
If you keep your assets in a custodial wallet or on exchanges, we would recommend transferring them to a non-custodial wallet where you are in control of a private key. In a nutshell, custodial wallets are the ones where you are not in control of your private keys, and you are unlikely to be the owner of the coins. Non-custodial wallets, on the other hand, allow users to hold and own their private keys and simultaneously have complete control of their funds.
There are two types of custodial wallets; cold storage wallets and hot wallets. Cold storage is usually a hardware wallet that stores your money offline, often a USB device. Hot wallets are software wallets that connect to the network and give you updated information about your funds. We will not discuss the benefits and drawbacks of these wallets as it is beyond the purpose of this article. Nevertheless, we would always recommend keeping your coins offline for better protection.
Recovery keys as private keys
Whenever you set up new non-custodial wallets, a new recovery phrase of 12 or more words will be created. You will need to write them down in the exact sequence provided. Some wallets give an option to view the private keys to each coin. You may write them down as you will also be capable of recovering your funds. With private keys, you can recover your coins anywhere with any wallet (as long as the wallet supports a particular asset). The same goes for the mnemonic phrase. The benefit of using the mnemonic phrase is that it contains human-understandable words that are easier to remember and less likely to make mistakes.
Online Security
Online security is a frequently debated, never-ending topic. And it is understandable. Access to the internet is very convenient but comes at a price of high vulnerability. Offline security, on the other hand, is rarely a topic (compared to online security), and it should concentrate more attention.
Single point of failure
The biggest problem currently faced by investors of cryptocurrencies is how to protect access to your digital funds. Storing online recovery phrases or private keys is the biggest mistake and should be highly disregarded. Security experts always recommended keeping the confidential information that secures access to your bitcoin and other digital currencies offline. You already know that storing information securely offline can also be quite challenging because losing recovery keys can lead to losing your assets forever. There is plenty of online content explaining the best way to store the information, yet they often contain poor advice. They usually have one problem in common — which is the single point of failure.
One Step Ahead is an application that provides an easy solution to a single point of failure problem. The application has a function to split your confidential information into three pieces and feed them directly into the printer. After printing, you end up with three sheets of paper, each containing fraction of your entry. Any two prints put together will allow reconstructing of the complete data. Distribute these three prints into three different secured locations. It is unlikely that two fractions of information will be compromised at the same time. With the solution provided by the app, you buy the time to act quickly in case of an incident.
What should you do in case of a theft?
You must act quickly.
Although this solution provides a safety net, if the information was compromised, we highly recommend taking further security measures. Change your passwords, move your bitcoin and other cryptocurrencies to a new wallet and obtain new mnemonic phrases or private keys. Make sure you are still one step ahead and protect your recovery keys and passwords over again using the application.