If a processor holds your funds, you can skip this and protect your account login instead. If you self-custody, this is the most important thing you will set up, and it takes about ten minutes done right.
The goal is simple: make sure you, and only you, can always recover your wallet, even after a lost phone, a fire, or a theft.
What a seed phrase is, briefly
When you set up a self-custody wallet it generates a list of words, usually twelve or twenty-four. Those words can restore your wallet on any device. Whoever has them controls the funds, and no company can reset them.
The seed phrase is the money. Anyone who has it can spend your funds, and no one can recover it for you if it is lost.
The backup routine
- Write the words on paper by hand. Do not type them into a phone, a photo, or a cloud note.
- Make a second copy and store it in a different secure location.
- Consider a fireproof or metal backup if you will hold meaningful amounts.
- Verify you copied the words correctly before moving any funds.
Where to store it
Treat the backup like a large amount of cash or a passport: a safe, a locked drawer, a safety deposit box. Two copies in two places protects against a single disaster without spreading the secret too widely.
What never to do
- Never type your seed phrase into a website. Legitimate tools never ask for it.
- Never store it as a photo or in a notes or cloud app.
- Never share it with support agents, no matter how convincing.
The Merchant Security Playbook covers the full routine, including hardware wallets and scam-spotting.
Common questions
- What if I lose my seed phrase?
- If you lose it and also lose access to the wallet, the funds cannot be recovered by anyone. That is why two backups in two secure places matter.
- Do I need a seed phrase if I use a processor?
- No. A custodial processor manages keys for you. In that case, protect your account with a strong password and two-factor authentication instead.