How and where to store cryptocurrency: an overview of safe storage methods

What to choose - hardware, exchange or software wallet. How do they differ and what tasks are they best suited for?

Many people often say that cryptocurrencies are “stored” in wallets, but this is technically incorrect. Funds are stored on the blockchain: a distributed, decentralized ledger that is the basis of the cryptocurrency ecosystem. Wallets, in turn, contain important data that allows the user to access these funds directly within the blockchain and, if properly managed, ensure their safe storage. Today we will talk about the structure of wallets, their classification, and provide a list of the most convenient for the end user, in terms of comparing their functions.

What is a cryptocurrency wallet and what is stored in it

A cryptocurrency wallet is an element of an extensive network that stores data about all transactions carried out in it. There is no money as such in such a wallet - there is only information that someone transferred funds to you, or you sent them to another user. Based on these transactions of income and expenses, the current balance is formed.

Another difference between crypto wallets and Yandex.Money, WebMoney or other virtual platforms is the absence of a central issuer. There is no single company that controls the transfers. At most, there is a company that carries out maintenance of the software part, which we see as an interface. All operations take place internally – on the blockchain – and intervention in them is impossible.

Another significant difference between cryptocurrency wallets and fiat wallets is the ability to view the entire transaction history of any user. Information is recorded on the blockchain, and special blockchain browsers provide the history of transactions and addresses associated with them for public viewing. True, it is impossible to determine which specific person the address belongs to.

What are the types of cryptocurrency wallets?

Several types of wallets have been developed for storing cryptocurrency :

• desktop;
• mobile;
• hardware;
• web versions;
• paper;
• accounts on crypto exchanges.

All of them can essentially be divided into two large categories - cold and hot.

What is Hot Storage (Online)

Hot wallets for cryptocurrencies are always connected to the network and have access to the blockchain. This category includes crypto exchanges and various online services. The advantage of the method is its ease of use. You can quickly use your wallet, send or receive money at any time.

The downside is lower security compared to the previous option. Services and especially exchanges are often hacked, so it is not recommended to store large amounts of money “hot”.

Now let’s move on to a more detailed consideration of current types of wallets.

Can companies use cryptocurrency as collateral?

It would seem that there are no obstacles to this. Law No. 259-FZ recognized cryptocurrency as property, which means it can be accepted by the bank as collateral to secure a loan.

But, as in the famous proverb, “it was smooth on paper, but they forgot about the ravines and walked along them.” Banks do not accept cryptocurrency as collateral for a loan. The reason for this is the lack of instructions, methodological recommendations and similar documents from the regulator - the Central Bank of Russia.

Perhaps the situation will change in the near future, because the digital currency market is gaining momentum year by year.

What are software wallets

These include local desktop or mobile applications. Desktops are divided into two more subtypes: “thick” and “thin”. Each option has advantages and disadvantages.

For example, thick wallets have a very high level of security. When you install it on your computer, the full blockchain (about 300 GB) is downloaded, and in the future, when performing operations, the program only needs to update the chain, making sure that the blocks are authentic. Access to the program is possible only if you have a private key - this is a program file that must be stored in a safe place. Its loss is fraught with the complete loss of funds stored in the account.

Thin wallets do not download the blockchain, but constantly access the network during operation. Suitable for use on laptops/tablets and have a user-friendly interface. However, to verify transactions, the wallet turns to a third-party resource, which can result in hacking.

Examples of software wallets:

1. “Thick” is, first of all, Bitcoin Core. Official client that can be downloaded from bitcoin.org. Versions available for all operating systems.

2. “Thin” – Electrum, a popular and convenient wallet with a high level of security. There are versions for storing Bitcoin and its forks.
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“Thin” cryptocurrency wallets include: Exodus, JAXX, SatoWallet, etc.

Mobile wallets (applications) are only thin, since it is impossible to download a full-fledged blockchain onto the device, and there is no point. Examples of such applications are Coinomi, JAXX, Lumi, Blockchain, Mycelium, Infinito Wallet, Guarda, Kcash, Agama Wallet Mobile and others.

Cryptocurrency for beginners. How to start using Bitcoin

Everyone who has access to the Internet has heard more than once about the “magical” world of cryptocurrencies. There, ordinary people become real investors and increase their initial capital many times over. But there are also those who went there indiscriminately: they didn’t know what to buy, where to store and how to use it. Such “investors” quickly lose all their savings and begin to shout that Bitcoin is a fraud and, in general, an attempt by global Freemasonry to swindle money from honest people.

Therefore, before you start using cryptocurrency, you need to at least learn the basic principles of working with it. For example, read this article.

Types of cryptocurrencies

Cryptocurrency is a digital currency built on Blockchain. Cryptocurrency is also called “crypto”, “digital coins”, “virtual money” and any other combination of these words. The king of cryptocurrencies is Bitcoin, launched in 2009 by a certain Satoshi Nakamoto. The real name of this person (or group of people) is still unknown.

Australian businessman and scientist Craig Steven Wright has repeatedly hinted that he is Satoshi Nakamoto. Wright's evidence does not inspire confidence.

To get Bitcoin, you need to mine it. Mining is the process of solving complex mathematical problems on computers. In return for their decisions, computer owners receive coins, which are stored as records on the blockchain. Blockchain is like a digital ledger that is stored on all users' computers at the same time.

Blockchain cannot be deceived or counterfeited. Even if you put a computer with a fake entry on the network, other computers will immediately compare it with their own and refuse to accept it. For successful hacking, you need to fill the network with fakes more than half - and this is almost impossible.

What are altcoins

Ethereum and Ripple are the most popular altcoins.

The success of Bitcoin led to the emergence of alternative cryptocurrencies (altcoins). The most important of them are: Ethereum, Ripple, Litecoin and Monero. They are also based on the blockchain, but are independent of the original algorithm. Therefore, they can use other types of encryption and process transactions faster.

As a rule, prices for altcoins depend on the Bitcoin exchange rate. In February 2022, when Bitcoin increased 18 times, altcoins also increased significantly in price. And when Bitcoin began to fall, they fell along with it.

What are coins and tokens

Altcoins are the general name for coins (except Bitcoin) and tokens.
But there is still a difference between them. Coins are a currency. They can be earned (mined) and spent on goods and services. Coins are built on Blockchain.

Tokens are more like securities (shares) built on a supporting platform - for example, Etherium or Waves. They confirm the presence of a share in a project, and their value depends on the success of the project. Tokens cannot be mined, they can only be purchased. You can’t spend them directly either, you can only sell them for another currency or exchange them for the services of the company that issued them.

Why are tokens no worse than coins?

Coin prices are stable relative to the market and correlate with it.
Investing in coins is the same as investing in the market. As it grows, so do your savings. True, slowly. Tokens are already shares. Their cost is tied to the project they represent. If the project takes off, the price of tokens can increase significantly in a few hours. But if it falls apart, it will fall below the market value.

Therefore, coins are worth buying for those who just want to use cryptocurrency and do not want to take risks. And tokens are suitable for risky investors who want to earn money quickly and immediately.

How to spend cryptocurrency

Most people believe that it is impossible to purchase real goods or services with Bitcoin.
But this is no longer a problem. Microsoft, PayPal, Subway, Shopify, Virgin Galactic and dozens of other large companies accept cryptocurrency. Full list here. Even if the company you need does not accept cryptocurrency, you can exchange it for hard, fiat currency - for example, dollars. The easiest way to do this is with a special bank card for cryptocurrencies.

But before you start using the card, you need a wallet.

Choosing a wallet

Cryptocurrency wallet is an application, program or separate device for sending, receiving or storing electronic money. Below are the five types, with a short description of the advantages and disadvantages:

• Software wallet
  (Bitcoin Core, Exodus). These wallets store crypto directly on your computer. And you need quite a lot of space for this. For example, the minimum installation of Bitcoin Core requires at least 145 GB of hard drive space - and that's just for one currency;
• Online wallet
  (Blockchain, Wirex). These wallets store your coins in the cloud. You can use them from any device, even your phone. But you need to choose your wallet carefully - if someone hacks it, you will lose all your money. Therefore, carefully read reviews from other customers before making your final decision.
• Hardware wallet
  (Trezor, Ledger). These wallets are separate devices, making them much more difficult to hack than a regular computer. But you need to carry them with you at all times, and also remember the PIN code. And don’t forget, otherwise you’ll be like Mark Fraunfelder!
• Mobile application
  (MyCelium, Breadwallet). An application for smartphones on Android or IOS that allows you to manage your funds. Convenient, easy and fast storage method, but with a low level of security. Plus, if the phone is stolen, the thieves will have full access to the wallet.
• Paper wallet
  (WalletGenerator.​net or MyEtherWallet.​com). A private and public key generated using a special website, which can be printed or written down. It should be remembered that, except for the sheet of paper on which the keys are written, they are not found anywhere else, so the loss is equivalent to the loss of all the money that is in such a wallet.

Out of all this, I advise you to choose an online wallet.

Why online wallets are better

Most newcomers to the crypto market choose online wallets. And that's why:

1. No need to store hundreds of gigabytes of history on your device.
2. The interface is convenient and understandable; there is no need to study it further.
3. The level of security is usually higher than in mobile wallets.
4. You can use it both from a PC and from a mobile phone.

How does an online wallet work?

Online wallets do not store cryptocurrency.
They only store public and private keys to your money. The public key is the address to which other users send you money. In principle, it is similar to email.

A private key is a set of letters and numbers that allows you to access money. If the public key is email, then the private key is the password for it.

Some people don't like the fact that an online wallet has their private key. But it is needed so that they can confirm your identity. It's like complaining that Google knows your Gmail password—how else can you prevent other users from reading your email?

How to choose an online wallet

Getting an online wallet is a matter of a couple of minutes.
But first you need to find a reliable service. One that won’t lose users’ money or run away with it to Thailand. Before creating a wallet, make sure that your coins will be stored in a “cold” wallet - storage that is not connected to the Internet. This one is harder to hack

Study the company, its team, reviews about it. Finally, make sure you are willing to trust a third party with your money. And only then create a wallet.

How to exchange cryptocurrency for fiat money

Fiat money is regular, hard money issued by a government. For example, dollar or ruble. And since many services do not yet accept cryptocurrencies, we still need fiat money.

There are three main ways to transfer money from crypto to fiat:

1. Cryptocurrency exchangers
   (Coinbase, GDAX). You should choose an exchanger just as carefully as you choose an online wallet. Check the safety, read reviews and reviews of other people who understand this. One unpleasant story that happened with the large exchange Mt.Gox has already been discussed on Habré.
2. Cryptocurrency trading platforms.
   On these platforms, sellers can find buyers - and vice versa. After the initial “meeting” on the site, users decide for themselves how they will transfer funds to each other. Usually they meet in person or use bank transfers.
3. Cryptocurrency cards
   (Bonpay, Spectrocoin). Special bank cards for paying directly or withdrawing money from an ATM.

Maps are currently not available for Europe and the CIS countries because the only map provider in Europe has ceased to exist. But many companies promise to release new ones in the next few months.

Why you shouldn't trust trading platforms

Trading platforms are very safe.
But only at first glance. In fact, this is the riskiest method of working with cryptocurrencies. There have already been cases where thieves received bitcoins and did not send fiat transfers - and vice versa. Or they used someone else’s cards for this and the real owner later disputed the transfer. And during a personal meeting, users were pointed at with a gun and forced to transfer bitcoins for free.

Therefore, cryptocurrency trading platforms are the last place where you should change your currency.

What you need to know before entering the cryptocurrency market

The world is still trying to understand what kind of beast this “cryptocurrency” is.
Therefore, you should prepare for a variety of surprises. The entire market is downright volatile, with prices changing hourly. For example, in February 2014, when Mt.Gox crashed, the price of Bitcoin fell by almost half from $837 to $439 within a month. And in December 2017, the price of Bitcoin rose from $10,000 to $19,000, thanks to hype and high demand. In both cases, there were players who made fortunes from it - but there were also those who went bankrupt.

On the thirtieth anniversary of Black Monday—the day the stock market fell 28%—Alexander Tapscott said, “In the crypto market they would just call it Monday.”

The price of cryptocurrencies is highly dependent on the media. News about regulations, quotes from famous personalities and other publications greatly influence the market course. For example, negative comments from the Indian Finance Minister led to a drop in the exchange rate by $500.

Even so-called “experts” are often wrong. Therefore, it is important to have your own opinion and deeply analyze everything that happens in the market.

How to learn more about cryptocurrency

Before entering the market, I advise you to read a couple of books to understand why cryptocurrencies were created, how they work and who the key figures in this area are.
One such book is Digital Gold by Nathaniel Popper. This book is remarkable because it is easy to read and tells a fascinating story about how and why it all began almost ten years ago, and who the people were at the origins of Bitcoin. Also choose tools that will help you keep abreast of events: news sites (Forklog, Bits.media), mobile applications for conveniently finding information and tracking market changes (Blockfolio, CoinCap), charts and statistics (Coinmarketcap).

How to safely store cryptocurrency

A few useful rules to help keep your funds safe:

• Always make a backup copy of your private key. You can store it on a USB flash drive, but be careful, as there are many cases where such a flash drive has been lost or damaged due to children or pets. Or write the private key on paper (it is not recommended to use a printer or print it out), but, again, keep this record in a safe place. The Winklevoss brothers, famous crypto-billionaires, used this method, but in a more sophisticated form: they cut the key printed on paper and stored it in different cells in the bank.
• Typically, private keys can be recovered using a passphrase, which consists of 12 or 24 words. Make a copy of this phrase as well.
• Create a mailbox that you will use only for this wallet. Only for THIS WALLET.
• Use two-factor authentication wherever possible. Just install an application that will generate a password for your accounts and enjoy another level of protection.
• Choose reliable exchanges and exchangers with a good reputation to avoid unpleasant consequences.
• Update your software regularly and install the latest version of the wallet you are using.

Conclusion

Cryptocurrency is not just money, but technology, innovation and business. Blockchain gives us an amazing technology whose potential we have yet to unlock. It gives us the opportunity to build a completely new world, where freedom, privacy and protection of human rights are indispensable components of everyday life. Investing in cryptocurrency can be a smart step towards this future.

What is online storage (browser-based)

Online wallets are services that are owned by a third party, and the developers undertake to store private keys on their servers. Most often, such wallets are multi-currency, and their interface allows you to quickly exchange one currency for another.

The advantages include quick registration, no need to enter personal data, speed and ease of use. The disadvantage is the same threat of hacking. No service is 100% immune from hacker attacks. In addition, the site charges an additional commission in its favor for each transaction.

Examples of popular online wallets:

1. Coinbase – allows you to work with Bitcoin and Ethereum.

2. Blockchain is a website with a user-friendly interface and a large number of functions for comfortable work. Supports working with cryptocurrencies: Bitcoin, Ethereum, Bitcoin Cash, Stellar Lumen.

3. MyEtherWallet. Interface for working with Ethereum cryptocurrency and ERC-20 tokens.

Is it possible to pay for goods, works, and services with cryptocurrency?

The law recognizes digital currency as a means of payment (clause 3 of article 1 of Law No. 259-FZ). But, being a means of payment, in Russia it is prohibited to accept cryptocurrency as payment for goods, work, and services. The ban applies to legal entities and citizens who stay in Russia for at least 183 days during a calendar year.

This means that you can carry out any transactions related to purchase and sale with cryptocurrency, pledge it, exchange it, but you cannot pay for purchased goods, works, or services. The only legal tender on the territory of the Russian Federation that can be used to pay for goods, work, and services is the ruble.

Account on a crypto exchange for storing cryptocurrency

In English, the method of storing cryptocurrency on an exchange is called “custodial wallet”. In this case, private keys are stored by the service operator - that is, on the exchange servers. The main advantage that makes people choose this method is the constantly available trading opportunity. Relevant for traders who make money by buying and selling currencies. Finally, there is no need to download any software to your computer; all transactions take place online.

Disadvantages - no cryptocurrency exchange can guarantee 100% safety of money. Almost all sites have encountered attacks, and this always entailed more or less significant losses for users.

Examples of crypto exchanges that allow you to store funds in your account for free:

1. Binance. One of the most popular trading platforms today, where you can buy any of hundreds of cryptocurrencies for BTC, USDT, ETH or BNB.

2. EXMO. A fairly reliable platform, in demand among users from the CIS countries. Also supports fiat currency in addition to digital.

3. Localbitcoins. Online platform for buying or selling Bitcoin. After registration, a wallet for storing cryptocurrency is provided.

Review of exchange wallets

There is an opinion that storing funds in exchange accounts is an undertaking doomed to failure. However, millions of investors and traders around the world choose exchanges, because only custodial wallets provide a subsequent return of funds in case of loss of the physical media.

Currency.com

Currency.com is an online tokenized asset trading platform designed to make cryptocurrency transactions quick and easy. The Currency.com platform facilitates not only trading of tokens, but also other types of financial assets. Recently, Currency has significantly improved its functionality, and now the exchange can rightfully be called not just an excellent place for conducting transactions, but also the safest place to store your cryptocurrencies.

Pros:

• Official regulation: the exchange is entirely aimed at interacting with the user, and stores his funds in accordance with the legislation of the Republic of Belarus. This reduces non-stock exchange risks
• Easy deposit and withdrawal of funds: cryptocurrency stored on currency.com can always be easily withdrawn, just as it is easy to replenish your wallet.
• Full Russian localization: all exchange functionality is completely in Russian
• For residents of Russia and the CIS countries, you can always use the withdrawal of funds to Sberbank accounts
• Over 1000 liquid assets that allow you to store not only cryptocurrency, but also any kind of other financial instruments in complete safety and in accordance with global legislation.
• Currency.com can always provide the user with the necessary reporting, which will confirm the legal origin of the funds.

Conclusion. Currency.com is one of the best options for storing cryptocurrency for investors located in the CIS countries. Low commission costs and fast withdrawal of cryptocurrencies to any payment systems make Currency a clear leader in the storage market. The security of the end user is the priority goal of the Currency crypto exchange, for which advanced technologies were used in its development. For example, all the necessary data is stored on Equinix data processing servers, which services such giants as NASDAQ and Dow Jones, the Frankfurt and London Stock Exchanges.

Binance

Binance is currently one of the largest cryptocurrency exchanges in the world, and is the most popular among traders. The platform has a huge amount of functionality and allows you to store funds safely, constantly improving its protocols.

Pros:

• Large list of supported tokens
• When exchanging cryptocurrency for cryptocurrency, Binance's fees are the lowest in the industry.
• Binance takes security very seriously, and upon registration, users are asked to set up two-factor authentication (2FA), further demonstrating the exchange's commitment to secure storage.
• Since Binance has become one of the most popular exchanges for buying, trading and selling cryptocurrencies, there are a lot of transactions happening on its platforms all the time. This is an important factor that allows you to quickly carry out transactions with assets, and, if necessary, move funds in such a way as to extract maximum profit from storage.

Minuses:

It is unknown in which country the exchange is registered.

Conclusion. Binance offers a huge number of internal digital wallets for over 80 cryptocurrencies, with the most popular ones including BTC, ETH, USDT, EOS and BNB and many others; In addition, for those who still consider using an exchange wallet unreliable, a “trusted” wallet option called Binance Trust Wallet was invented, which allows you to store Ethereum and more than 40 tokens from the decentralized application environment; Integrated directly with the blockchain, Trust Wallet is a wallet that allows you to fully control your assets without leaving the Binance environment.

Coinbase PRO

Coinbase Pro, formerly known as GDAX, is a cryptocurrency exchange and trading platform. This exchange stands out among other things due to its low fees and strong security measures (it has never been hacked). Additionally, the platform stores 98% of user funds offline using cold storage.

Pros:

• Currently, this is the easiest, safest and cheapest method of exchange due to low commission costs.
• High security of the platform due to the storage of 98% of funds offline and frequent technical and financial audits.
• Very good user interface and intuitive navigation.
• Wide range of fiduciary deposit and withdrawal options.
• Insured deposits.

Minuses:

• Private keys are stored on Coinbase servers, which does not protect users from hackers gaining access to their funds;
• Large volumes of requested personal data: KYC and AML are impeccably observed on the exchange, which will not allow you to fully interact with the platform without entering your personal data into the database.

Conclusion . Considering all its features, Coinbase Pro is undoubtedly one of the best exchanges on the market if the user is not confused by the amount of personal data requested.

Huobi

Huobi is a fairly secure, trustworthy platform that has managed to maintain a positive reputation, free from issues related to fraud or major glitches. Although today, due to active restrictions on cryptocurrencies in China, its jurisdiction has been transferred to other countries, Huobi continues to increase the volume of transactions and provide users with safe storage of funds.

Pros:

• High liquidity;
• Has an interface compatible with mobile devices.

Minuses:

• Transaction fees are quite high;
• Provides several ways to top up your account.

Conclusion. Huobi Exchange has invested heavily in security and has undergone many third-party tests. They offer two-factor authentication, SMS and email notifications, and PGP encryption. Over 98% of client assets are stored in a multi-signature cold wallet, providing a high level of security for the funds stored there. By the way, once the exchange was hacked, however, the attackers were unable to steal user funds.

What are hardware wallets

A hardware wallet for cryptocurrency is a storage device in the form of a physical device the size of a flash drive, where you can safely store balance information and private keys, and you can use such a wallet to transfer funds only when you connect it to a computer or other device. This virtually eliminates the possibility of hacking.

The two most popular options among hardware wallets are:

1. Trezor. Released in 2013. The cost ranges from 69 to 149 euros depending on the model.
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2. Ledger Nano S. Released in 2016. Costs about 80 euros.

Both devices have a display with which you can perform minimal account management or view your balance.

What are paper wallets

A method of cold offline storage of cryptocurrency, which is suitable for long-term investors - using money is not very convenient.

The point is that two keys (private and public) are printed on a regular sheet of paper in the form of QR codes. The sheet must be kept in a secure place where it cannot be stolen or damaged. The client gains access to his account by scanning a QR code.

A paper wallet is unlikely to be needed for those who plan to frequently sell and buy cryptocurrency. But for long-term storage the option is suitable.

One of the programs that are available on the Internet will help you make a paper wallet. It will randomly generate codes and then give you the opportunity to print them. All such programs are open source, so anyone (knowledgeable in programming) can look and make sure that they do not perform any unnecessary actions.

For example, online bitaddress private key generator:

Is cryptocurrency inheritable?

Theoretically, there are no obstacles to inheriting digital currency. However, in practice this is not yet possible; there is no clear mechanism for transferring such property to an heir. In addition, to access the cryptocurrency you need a password, which the heir does not know. Therefore, such “virtual” property cannot be inherited. The only way out of this situation, at least for today, can be a will drawn up by a notary, which specifies an electronic key or password for access to a digital wallet.

For example, in China, a law on the inheritance of cryptocurrency has been adopted and the mechanism for receiving an inheritance has been described. This fact should not be surprising, since China has become the first country in which salaries for certain categories of citizens are paid in cryptocurrency. For example, officials receive salaries in tokenized yuan.

What are public and private keys for?

Bitcoin and all coins that came after it are based on pairs of cryptographic keys:

1. Public – generally known.
2. Private – hidden. They are carefully guarded, because if an attacker takes possession of the private key, it will not be difficult for him to steal the wallet owner’s funds.

Visually, the keys look like a sequence of letters and numbers; this is the result of conversion to the WIF format. In the original, these are just very large numbers.

Private keys are generated by a crypto wallet and stored with its help. They are necessary for data encryption and user authentication, as well as for generating another key - a public one. A simplified “version” of the public key is the address to which transactions are sent on the cryptocurrency network.

The private key, firstly, gives the user access to his funds, and secondly, signs the transactions he sends. Despite the fact that transactions in the blockchain are visible to everyone, no one sees the private key; it only serves as confirmation that the sender has the right to perform such an action.

For example, this is what private (bottom of the picture) and public keys or addresses of the Bitcoin cryptocurrency (top) look like in various formats:

For your information. Bitcoin wallets use addresses that begin with 1 or 3. Bitcoin private keys usually begin with “L” or “K” (WIF format) and are 52 characters long.

Is it safe to use cryptocurrency wallets?

In cryptocurrency systems, the security and integrity of your account is guaranteed by a network of agents (segmented file transfer or multi-source file transfer) that are verified by miners. They protect the network by maintaining high speed processing algorithms.

Breaking existing security in cryptocurrency is mathematically possible, but the cost of achieving it is unacceptably high. For example, an attacker attempting to double-spend the BTC blockchain would require more computing power than all the miners in the system. But even then it won't have all the control capabilities. A hacker needs to pass the 51% power threshold to even get close to this goal.

Seed phrase

If you lose access to a cryptocurrency wallet, it can be restored using a seed phrase of 12 (24) unrelated words. This phrase looks something like this:

The sentence has no meaning, it just needs to be written down or remembered somewhere. Then, no matter what happens to the wallet, you will always be able to restore access to your funds.

Clients of hierarchical deterministic wallets can take advantage of this advantage - almost all modern wallets work with this technology. The seed phrase is generated simultaneously with the creation of the wallet, and it is then that it needs to be written down or saved somewhere.