Glossary – ColdStorageScore

Backup Copy

A duplicate of your recovery words stored in a separate location. Having multiple backup copies protects you if one is lost, damaged, or stolen.

Recovery Words

A list of 12, 18, or 24 words that act as your master key. Anyone who has these words can access your Bitcoin, so they must be kept secret and secure.

Seed Phrase

Another name for recovery words. These words are generated when you first set up a wallet and are used to restore access if your device is lost or broken.

Passphrase

An extra secret word or phrase you add on top of your recovery words. This creates an additional layer of protection—even if someone finds your recovery words, they still need the passphrase to access your coins.

Hardware Wallet

A physical device (like a USB stick) that stores your recovery words offline. It signs transactions without exposing your keys to the internet, making it much safer than software wallets.

Redundancy

Having multiple copies or backups of your recovery words in different locations. This ensures you can still recover your Bitcoin if one backup is lost or destroyed.

Multi-Signature (Multi-Sig)

A setup where multiple people or devices must approve a transaction before it can be sent. This adds extra security by requiring cooperation from multiple parties.

Recovery

The process of restoring access to your Bitcoin using your recovery words. This is what you'd do if your hardware wallet breaks or is lost.

Encryption

Scrambling your backup copy with a password so that even if someone finds it, they can't read it without the password. This adds an extra layer of protection.

Air-Gapped

A device or backup that is never connected to the internet. This makes it nearly impossible for hackers to access it remotely, significantly improving security.