"Over my 6 years in crypto, I've witnessed dozens of friends, family and fellow Kiwis lose access to their crypto holdings by way of bad private key management." We're talking hundreds of thousands of dollars, lost to the sands of time, all of which was preventable.

The truth is, if you don't take the time to properly understand and setup a backup system, you're basically just throwing your money into the abyss. If you sit on a sketchy backup system for years, and then suddenly find out you can't access your coins – you didn't just lose access to your holdings, you lost access the day you didn't correctly back them up.

Absolute financial freedom means absolute financial self-responsibility and accountability. Follow the principles in this guide and hopefully we can save you tears and heartbreak, ensuring you can safely hold your crypto and access it again in the many years to come.

A crypto wallet backup system is a personal process you design for yourself, so that at any point in time, even if your devices explode, you can gain access to your crypto wallets.

In this guide we'll showcase some of your options, but ultimately this is something you need to set up for yourself. A sequence of steps you have planned for if you lose your wallet.

A common backup system goes as follows:

• Your phone or computer breaks – you realize you've lost access to your crypto wallet.
• You purchase a new device, re-download your wallet, and begin the recovery process.
• You go hunting in your safe or filing cabinet for the paper storing these details, such as your 12 word phrase, which you were instructed to document upon creating your wallet.
• You enter these details into your wallet, and hopefully if you documented your backup phrase and password correctly – your wallet will boot up and access is restored.

Now, what happens if your house burns down, floods, there's a natural disaster, or some bastard breaks into your home when you're away and steals your backup. Or what if you get in an accident and your family can't access your funds to carry out your will? In any case, you no longer have a copy of the details required to gain access to your holdings.

Although all of this sounds unlikely, you can never be too safe. Research shows ~30% of all Bitcoin in existence is already lost due to poor private key management, equating to roughly hundreds of billion dollars in lost wallets which will never be transacted or sold again.

At the core of every crypto wallet is a public and private key.

Your public key is the address others use to send you crypto (like a PO box), and your private key is like the access key or password. Example of a Bitcoin key pair below:

It's always good to store your public key, for easy access, however the critical component in backing up any crypto wallet is backing up your private key. Your private key alone represents ownership of your wallet, and it's the single line of text that you must possess to gain access to your funds. It also goes without saying to never share your private key with anyone, as that's like giving unrestricted access to that person to move your money.

When you create a crypto wallet, specifically a multi-currency wallet like Exodus (where you store many different cryptocurrencies in the same wallet, i.e, Bitcoin, Ethereum, Monero) your Exodus wallet will automatically store your wallet's public and private keys for you.

So.. If your public and private keys are already stored in Exodus, what is there to backup?

When you create a brand new crypto wallet, like Exodus, there's generally three things that you must have a secure copy of to ensure you can gain access to your funds later on.

These include your 12 word seed phrase, your private keys, and your wallet password.

12 Word Seed Phrase

Your 12 word phrase, otherwise known as your 'seed phrase' or 'recovery seed', is a series of 12 common English words that serve as the master backup code to your crypto wallet.

Whenever you create a new a wallet, using Exodus as an example, you are immediately presented with this phrase and instructed to write them down and document them safely.

This is standard practice in the crypto space, and almost all wallets feature a 12 word wallet recovery system. Understanding this process is critical to safe crypto storage.

Note: in the second half of this guide, we'll demonstrate how and where you can store them.

https://keepass.info/

The next wallet backup / recovery system is using an offline password manager to store your backup details, which you can access digitally from many locations and devices.

This system involves creating an encrypted digital vault, such as by using KeePass, and storing your password, seed phrase and private keys inside this encrypted digital file. This file is protected by a master password, and you can store it across many locations.

KeePass is free, open source, was created in 2003, and is still used by hundreds of thousands of people today. "I use it on a daily basis and it's improved my security tenfold".

The benefit is you can always digitally access your backups, and you can also store other important passwords and information inside this system. It is, however more technical.

I could create a full guide on this but Alan Grainger, co-founder of Easy Crypto NZ, already wrote a superb guide on using KeePass to secure your crypto recovery keys and phrase.

You then store this encrypted file on multiple USB sticks, hard drives, in your emails, with the benefit that the master password is required to gain access. KeePass uses military grade encryption so provided you have a strong master password, you're bulletproof.

Note: You will still need to store a copy of your KeePass master password somewhere safe, so the paper wallet principles and system above are still applicable for this option.

Dropbox

Store your encrypted KeePass file in your Dropbox cloud storage for easy access.

Google Drive

Google Drive provides another secure location to store your backup file.

Email Storage

Send the encrypted file to multiple trusted email addresses you control.

This final method leverages your secure KeePass file in combination with cloud storage.

It means storing your digital KeePass file in multiple locations, scattered across your DropBox, Google Drive, Apple Cloud, home server, or whatever cloud system you use. You can also send your self a copy of your KeePass file to your emails, sent to multiple email addresses you trust, such as family, friends or your various personal email accounts.

This results in you having copies of your KeePass digitally stored in many locations, meaning if you lose access to one, you still have them backed up across your network. Provided you have your master password, you can easily use any of these options to unlock your digital vault, and access your 12 word backup phrase, password and keys.

Now that you have some ideas on wallet recovery systems, the next step is to set it up, and battle test it to make sure it works. "I would recommend toying around with the software and instructions above until you've created a secure backup system for yourself".

Consider drawing a map on some paper of the steps you must take to crack back into your crypto wallet holdings. After all, in many years you may forget the exact steps and details to your crypto wallet recovery protocol – take no shortcuts in setting up your own system.

Once it's all set up, I would recommend testing if you can access your file from scratch, before storing any sensitive information inside it. You need to know that it works, and have some level of experience with it to help you install trust and confidence in your system.