Losing access to your funds is inconvenient and it can be devastating depending on your circumstances. When using cryptocurrencies, you are responsible for securing your privatekeys. These keys allow you to spend the funds in the corresponding address. We recommend to backup your privatekeys or wallet.dat every time you make a new transaction on NATIVE and when updating your wallet version. If you are using SPV you should backup your seed when you initially create the wallet.
While using Komodo, you have 2 wallet options.
- SPV or Lite Mode: This mode lets you generate a seed (string of random words). The seed reproduces your privatekeys on the fly when using lite mode and it allows you to access your funds without having to download the entire blockchain. When using SPV after the initial creation of the wallet, you should take note of your public address and logout fully. Then login again with the same seed in order to verify the addresses match. This step will prevent you from sending funds to an address they don't control.
- Native Mode: This mode requires you to store a file called wallet.dat in the local Komodo folder. The wallet.dat holds all your privatekeys and you should always backup your wallet.dat after creating a new address or a change-address (These are created when doing a transaction in native mode).
SPV Lite Mode Best Practices
When you set up your wallet, you are asked to note down the recovery seed. This is usually 12, 15 or 24 random string of words.
Note: It’s also known as the seed key, recovery key, seed phrase, passphrase etc.
This seed is of utmost importance for the safety of your funds. It’s only by using this seed or the private key that you will be able to recover your Funds. Many users have underestimated this step while setting up a Lite wallet, and thus, they end up losing access to their Funds in the long run because of problems with the seed.
If you haven’t taken a backup of your wallet’s recovery phrase, you should do that right now.
Where should I keep this recovery seed?
Handwritten: You should pick Pen and Paper and write down your seed, this is the best way to secure it. Make sure that you write it down correctly, check for spellings and upper/lower case.
Text File: Copy the seed into a text editor like notepad that uses plaintext, do not use word processors like WORD or OpenOffice. They tend to add special characters at the start or end of the seed, which may result in wrong address and you can lose your funds.
WARNING: Before you send funds to your address, RE-VERIFY that your seed generates the same address. This will prevent you from sending funds to a wrong address by mistake. Additionally, It is not advised to keep digital copies. Pen and paper always has an advantage over the digital way of saving a seed. If you use a text file encryption is mandatory to ensure appropriate security.
Native Mode Best Practices
When you setup your wallet, the first thing you want to do is save your wallet.dat file. This file can be located in the following places depending on your OS:
- Linux: ~/.komodo
- OS X: ~/Library/Application Support/Komodo
- Windows: %AppData%/Komodo
Once your wallet.dat file is saved, you should also export the privatekeys: Generate a New Address and Export Privatekeys in Agama
Other Storage Methods
If you wish to use cold storage then Paper wallet is the answer. Paper wallets are an offline (cold storage) method of storing cryptocurrency. It includes printing out your public and private keys on a piece of paper which you then store and save in a secure place. The keys are printed in the form of QR codes which you can scan in the future for all your transactions. The reason why it is so safe is that it gives complete control to you, the user.
Another way is Hardware wallets. Hardware wallets are physical devices where you can store your cryptocurrency. They come in a few forms but the most common is the USB stick style typified by the Nano Ledger series.
Warning: If someone gets access to your seed or privatekeys, your funds can be at risk. Encryption is recommended and following the best practices guideline.