The process behind creating a Brainwallet is quite simple. You start by generating a key pair based on a cryptographic hash function such as SHA-256, RIPEMD-160, etc.
This key pair will be the encrypted version of your private and public keys respectively. However, it is quite difficult to store the entire encrypted private key, as they often come with a large number of characters.
Instead you will only store the semen recovery passphrase, which is 12 or 24 words.
Of course there is still a lot of information for the average person to commit to memory.
Once you memorize your seed recovery phrase,
you theoretically don’t need a physical copy of your seed, which is nice because if someone takes your seed phrase, it can completely drain your crypto wallet.
You may already realize that there are some serious risks involved in using a Brainwallet, however…
Brainwallets are very risky
There’s one main reason why Brainwallets are risky, but it’s huge: you might forget your passphrase.
The human mind is a bad source of entropy and memorizing a sentence of 12 to 24 words in the right order is no easy feat.
Also, if you were to become incapacitated, your cryptocurrency would be lost. Your family would not benefit from your crypto holdings because your Brainwallet is locked in your head.
Consider that people have lost millions of dollars worth of Bitcoin losing physical wallets, and you may realize that user error is actually the biggest cryptocurrency thief of all.
Therefore Brainwallets are not recommended for average crypto users.
Some viable and safe alternatives
Given the above risks, it is best not to use Brainwallets and instead store our cryptocurrencies using hardware wallets such as Trezor, Ledger Nano S, etc. These types of wallets are very secure and are backed by reputable teams with a long history of trustworthiness in the crypto-space.
In addition to protecting your private keys while using hardware wallets, you can also add extra layers of protection in terms of a 2-factor authentication process with apps like Google Authenticator or Authy.
There are many different ways to secure your cryptocurrency, and some people use computers completely offline to manage their crypto or one of the popular mobile apps. You could even use a third-party custodian if you feel you don’t have the ability to adequately secure your encryption.
If you are determined to use a Brainwallet, we suggest a physical copy of your recovery seed just in case. If you find you don’t need it after a few years, your mind apparently still works fine, you could potentially destroy the physical copy and rely solely on your mind. Again, not recommended!
