brain wallet

Brain Wallet Guide: Are They a Good Idea?

Since the very conception of blockchain technology, thousands of different methods for storing valuable cryptocurrencies have been tested. For blockchain-based companies, the creation of their own unique wallet has consistently been a lynchpin of eventual development. Companies have scrambled for their slice of the wallet market by coming out with new and innovative ways to store the Bitcoin, Ether, and altcoins of their loyal customers.

But one type of wallet seems to stand out as a unique and original way for consumers to store their precious cryptocurrencies. The “brain wallet” is a method of storing cryptocurrency that relies only on the memory of the owner of the account in order to be able to access the funds. It uses the mnemonic device which is usually employed to allow users to access their key if they have forgotten it. But instead of saving the mnemonic device or the key, the user never writes it down. They simply remember it.

Advantages of the Brain Wallet

The advantage of the brain wallet is pretty obvious from the basic structure of the system. A brain wallet adds an additional layer of security. Because the mnemonic device is never written down anywhere online, it only exists inside the mind of the owner of the account. The wallet is only accessible if someone knows the mnemonic device and can subsequently access the seed for the creation of the wallet initially.

This means that an attack which is based on taking the device from the computer of the owner of the wallet just is not possible. Traditionally, some Bitcoin attacks rely on the hacker gaining access to the remotely-stored mnemonic device, which would then give the attacker access to the wallet itself. If the creator of the wallet became incapacitated or even died, then the wallet and all of its holdings would be lost forever.

The situation in which this wallet idea would be most useful is any situation where someone feels that it is not safe to hold their wallet information on their own server. Additionally, if someone holds coins and needs to leave an area without having access to their computational device, it would be incredibly useful to be able to access their account later on via memorization of the key.

Brain Wallet Disadvantages

Unfortunately, the disadvantages of the wallet go hand-in-hand with the advantages that its proponents seek to uphold. In particular, the wallet’s reliance on the human mind is troubling, partially because of the inherent fallibility of memory. According to leading psychologists, there are several types of fundamental errors that people can make when it comes to trying remember something.

In addition to the conflation of different elements of memory, it is possible for people to suffer incidents that can remove the memory from their brain entirely. This is no problem if the mnemonic device is written down. But in the brain wallet setup, the loss of the memory associated with the mnemonic device means that the information, and money, in the wallet is gone forever.

Further, research suggests that brain wallets may be even more susceptible to hacking attempts than other forms of information storage on the blockchain. This is because of a variety of reasons, but the main problem comes from the fact that the brain wallet requires creators to come up with a random series of words to represent the key.

This becomes an issue when one recognizes that, for humans, coming up with entirely random series of words is incredibly difficult—perhaps even impossible. Even when someone tries their best to come up with random words, associations based on their own life get in the way. Furthermore, it is entirely possible that someone accidentally puts together words that are related to one another.

Studies conducted by research organizations on the blockchain have found that hackers can much more easily conduct a brute force attack on a wallet where the user has created their own key using mnemonic devices. The brute force attacks can be done in a variety of ways, but generally use word-association in order to guess the types of words which might be used in the mnemonic device. Once a hacker knows the device and all of its words, they then have access to the key and the contents of the wallet.

How to Create a Brain Wallet

The best way to avoid the hacking problems associated with a brain wallet is to use a wallet software in order to generate a unique seed phrase. Though it is possible to generate a seed based off of a pre-created mnemonic device by the user, this method is more likely to result in the creation of an easily-guessed or brute-forced phrase.

In order to create a brain wallet, a user simply needs to take steps to memorize the mnemonic phrase associated with the wallet. This can be done in several ways, but the easiest way is generally considered to be with the creation of a “mind palace.” With this memorization method, the creator of the wallet imagines a familiar building or place, and then creates a story which combines the familiar rooms of the “palace” with the words and nouns included within the mnemonic device.

Another method that might be used is the mnemonic peg method. This method can involve the creator of the wallet creating a fairytale or story involving all of the key words in the mnemonic device.

Advisability

In general, security professionals advise against the use of the mind wallet. While there are benefits to not storing mnemonic devices on a computer that is susceptible to hacking, consumers can just as easily store the mnemonic device in the real world, hidden inside of a safe or something else that is protected and secure.

This has its own pitfalls, but not storing the information anywhere likely creates the biggest security risks. It is possible that the account can be hacked, but it is also much more likely that the account’s information will be lost forever.

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