Security: Seed Phrases and Master Passwords

Wallets will generate a seed phrase that is more than likely not 12 or 24 randomly generated words that forms a unique combination, which is then used like a password to prove ownership of the wallet (and cryptocurrencies). When given a seed phrase, a user is in entire control of their wallet, with no third party privy to a user’s funds (such as a bank). As a result, a user is entirely responsible, being tasked with keeping their seed phrase safe from any risk of losing it or being hacked. 

It is advised that users keep a copy of the seed phrase offline, as seed phrases are susceptible to hacks and phishing attacks. Writing it down on a piece of paper and keeping it somewhere geographically safe, such as in a vault or safe box is a safe way of keeping a user’s seed phrase or master password secure. Hardware wallets, such as a physical medium (USD), can also be used as an alternative to an online wallet.