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Cryptocurrency is self-custodied, meaning there is no bank or support line to reset access if you lose it. If your device breaks, is lost, or fails and you have no backup, the funds are usually gone forever. A backup, typically your seed phrase, lets you restore your wallet on a new device. Without one, a single hardware failure can permanently lock you out of your coins.

A seed phrase is a list of 12 to 24 words generated when you create a wallet. It is the master key that can restore access to all your funds. To back it up, write the words down by hand in the exact order and store them somewhere safe offline. Never take a screenshot, email it, or save it in cloud storage, as anyone who sees it can steal your crypto.

Cold storage means keeping your crypto keys completely disconnected from the internet, unlike a hot wallet on a connected phone or computer. It usually takes the form of a hardware wallet or a written or metal-engraved seed phrase kept offline. Because there is no internet exposure, remote hackers and malware cannot reach the keys, making it the preferred method for holding larger, long-term amounts securely.

Store your seed phrase offline, away from screens and networks. Many people use paper kept in a safe, or a fireproof and waterproof metal plate for durability. Consider keeping a second copy in a separate secure location to protect against fire, flood, or theft. Never store the full phrase digitally, and never share it with anyone, including apps or people claiming to be support.

Common mistakes include storing a seed phrase as a photo or text file, saving it in email or cloud storage, and keeping only one copy that can be destroyed. Others share their phrase after falling for phishing scams, or write the words in the wrong order. Treat the phrase like the key to a vault: keep it offline, accurate, duplicated in a safe place, and completely private.

No offline wallet backup is needed for a crypto CFD position because you do not hold the underlying coins or private keys. Protect your trading account login instead. Crypto CFDs carry market, leverage and execution risk; whether you can owe more than your account balance depends on the broker’s negative-balance policy.