🔒 A short educational thread on #crypto/#NFT security 🔒
Specifically:
❔Seed Phrases
❔Private Keys
❔Hierarchical Deterministic Wallet
❔How to mint safer/trade safer/store your NFTs safer
What does it all mean? 🤔
Find out🧵👇please RT to expand our collective security🙏
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🌱 Each #MetaMask installation has a single seed phrase
🔑 Each account in a wallet (address) has it's own private key
💳 Private keys are used to sign transactions
💾 Seed phrases are used to restore private keys
Below you see "Export Private Key" against one account 👇
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👿 Compromise of a seed phrase 🌱 results in compromise of all accounts (private keys 🔑) under that seed phrase
👿Compromise of a private key 🔑 only results in that single account being compromised
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🔑 Private keys can be regenerated 🔁 from the seed phrase 🌱
🌱 The seed phrase cannot be generated 🚫 from a private key 🔑
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🌱 A seed phrase will always restore the same accounts / private keys 🔑 in the same order - this is all "predetermined"
The technology behind this is called Hierarchical Deterministic Wallet
Sounds complicated?
💭👇
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🌲 Hierarchical - in a hierarchy / tree shape, see diagrams below
💯 Deterministic - the seed phrase predetermines the private keys and addresses and will always generate the same private key/address pairs every time it's used to restore wallets
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This means you can restore the same seed phrase on any blockchain wallet software and access your accounts in the same way.
📖 Read more about Hierarchical Deterministic Wallets here: ledger.com/academy/crypto/what-are-hierarchical-deterministic-hd-wallets
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A good wallet setup for minting, trading and storing #NFTs could be three wallets setup like below:
1️⃣ Minting Wallet (MetaMask Account)
2️⃣ Marketplace Wallet (MetaMask Account)
3️⃣ Storage Wallet (Hardware - Trezor/Ledger)
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1️⃣ Minting Wallet 🆕
This wallet only connects to web sites for minting NFTs and should usually have nothing in it.
If you connect to a bad website by mistake, you should have very little, preferably nothing to lose 🛡️
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2️⃣ Marketplace Wallet 🔁
This wallet only connects to NFT marketplaces like @OpenSea and @LooksRare
You use this for buying/selling NFTs on the secondary marketplace and should have very little in it
If your computer gets compromised you should have very little to lose 🛡️
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3️⃣ Storage Wallet 🔐
This is a hardware wallet like a #Trezor/#Ledger. It's where you store all your NFTs longer term.
Once you purchase an NFT you want to keep, you should transfer it here for safe keeping.
❗This wallet should NEVER be connected to any websites ❗
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1️⃣ 2️⃣ 3️⃣ 🔐
With a three wallet setup and a procedure to follow when connecting to websites for minting or market places for trading, you have much higher security than doing everything with one wallet!
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🙏 I hope this prevents at least one person from a big compromise.
❔ Feel free to hit me up with more questions in reply 💬, I will answer ALL of them.
Please RT 🔁 to increase our collective security against the bad guys 😈🦹♂️!
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Credits 🙏 Thanks to:
@purebasestudio for inspiring me to educate more about security
@Wonderhands for sharing his 3-wallet strategy
@ZyoriTV for inspiring me to share more meaningful content