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Many Bitcoin holders rely on generating private keys offline through secure devices like Coldcard, Passport, or Jade. These devices are designed to be highly secure, encrypt private keys, and require PIN access. However, the Achilles heel emerges when owners write down the 12 or 24 recovery words on paper or steel. While these physical backups provide a sense of safety, they are vulnerable if discovered by intruders or during disasters.
The common practice of storing seed phrases in plain sight—beside the device or hidden within the house—presents a significant security flaw. If someone breaks in or if a fire destroys physical belongings, access to these backup words becomes compromised, risking loss of the entire Bitcoin estate.