October 5, 2020

The seed is your treasure as an investor in crypt coins part 3

The seed not only serves to back up your private keys. It has other uses that are well employed to provide additional security through the use of an additional word called passphrase. In this article we will detail some possibilities about its use.

By adding an additional word or passphrase, the total calculation of all private keys is altered, having totally different wallets from the initial seed.

We put as example the seed used in the previous articles, The seed is your treasure as an investor in cryptocurrencies part 1 and The seed is your treasure as an investor in cryptocurrencies part 2:

camp myself eye rubber spy picnic business knife element hurdle snow virtual horror attract dragon protect spread pen squeeze copy enact giraffe occur fuel

  • The first Bitcoin address that generates this seed is: 1Gt7rYMsJsSQgnfkH8EVQM53FQWc7dffQu

In the event that we add an additional word to the seed: camp myself eye rubber spy picnic business knife element hurdle snow virtual horror attract dragon protect spread pen squeeze copy enact giraffe occur fuel kuailian

  • We add for the example a word 25 “kuailian” which causes to generate totally new wallets whose first Bitcoin address is: 1AdGVz1V3FqcrKzx3qbuC78vFmEW5Rhh3a

Let’s look at some cases where it can benefit us:

  • Security in the back Let’s imagine that someone comes to have physical access where we store our seed. If we are using a passphrase that is not written down on paper, and we have it memorized, they would never be able to subtract cryptocurrencies since they would not have the private keys where the funds are stored. Obviously, we have to be careful not to forget this word that we use as a password, since we would lose access to the funds.

  • Protect yourself from extortion There have been some cases where people have been extorted with the aim of forcing them to send their funds in cryptocurrencies. We can use passphrase to hide our heritage. For example, we can have a passphrase with few funds, and have another passphrase with our patrimony or even several of them.

Passphrase: “Main” -> We have a few funds that would be what we show the thief.

Passphrase: “L1284Y” -> We have all the funds and in a hidden way, we only set it up when we want to make a transaction.

  • Resolving an inheritance When making a will, it is very risky to reveal the words of a seed to a notary where the assets are, and have them put down on paper. In addition, there can be problems in revealing the seed if, for example, we have three children and they don’t agree. Therefore, the following could be done:

  • We make the will where we indicate the 24 words of the seed camp myself eye rubber spy picnic business knife element hurdle snow virtual horror attract dragon protect spread pen squeeze copy enact giraffe occur fuel

With this seed we would not keep any assets.

We will provide each of our children with a secret word that only he should know, for example:

David: garden1

James: sunny3

Joe: computer5

In the wallets of each passphrase the different assets are stored, for example 1 Bitcoin and 10 Ether for each child.

  • David: (passphrase: garden1)

Bitcoin: 17egXpm5FMcYW7TPgPkmnuo16CiKbAE9bD

Balance: 1 BTC

Ethereum: 0x88a82c2b0b4ac86c54B388095667fC4BEf38FdFe

Balance: 10 ETH

  • James: (passphrase: sunny3)

Bitcoin: 16Kq2n46UmArRBiFMUBkdWm1W9etyacMYp

Balance: 1 BTC

Ethereum: 0xd130833404EC9550B1293acDFb153db61cbb8f29

Balance: 10 ETH

  • Joe: (passphrase: computer5)

Bitcoin: 1Eq14pRAr1g66AjU6YciRFtJ44DuPvzMg4

Balance: 1 BTC

Ethereum: 0x99D08F64E55EDe62f49e72402B6D996E8614A759

Balance: 10 ETH

This means that, once the will is resolved, each child will have access to its funds without the possibility of third parties having access at any time. Even siblings themselves cannot have access to each other’s funds.

There are as many possibilities as ideas you may have, each person can find different uses. It is also true that so much security can play against you, you have to be very aware of everything you do, and be sure that in case of loss or theft of your wallet you can recover your funds in full.