What does my wallet's backup do?

This article explains the Exodus Backup Process and why it is critical to store your backups safely and keep your password strong and unique.

Backing up your wallet is the most important thing you can do to make sure you will always have access to your coins. And you only need to do it once. After that, Exodus takes care of everything, so you can rest easy knowing that if something ever happens to your wallet you can restore it very easily; all your balances, transactions and exchange history will be there as you left them. 

Backing up is the most important action you will take in order to protect your funds. During the Backup Process, you create your wallet's password and must write down your 12-word phrase (Seed). All of these are really important and they are all private information for your eyes only!

Before we explain things a little more, the most important thing to understand about Exodus (and software wallets in general) is that  it is not a centralized, custodial service. All this information that gives you access to your funds, and even your addresses and transaction history, is stored on your computer and your computer alone. Exodus as a company has no access to it and you don't have an account with us, which is why we can't implement two-factor authentication (2FA), as we know it.

What does this mean for you? Two very important things:

  1. Financial sovereignty. You are in complete control of your money, which is the essence behind the creation of cryptocurrencies. No one can lock, freeze, confiscate or in any way deny you access to your money. With Exodus, only you control your Private Keys; with custodial services, they do it for you. This is what ultimately gives those services control over your wealth and the power to freeze funds or authorize transactions on your behalf- just like a bank.
  2. You are in charge of the security of your funds. Consider Exodus like the wallet in your pocket or the safe in your house, while a custodial service is more like a bank which has their own security. This means you are the only person who is responsible for your funds, so learning how to keep them safe is very important.

So, what does this backup do then? 

Let's make this all a little clearer:

  1. Your backup, which is your 12-word gives you the tools to restore your wallet if something happens to your computer. 
  2. Exodus automatically updates your transactions' metadata on our servers after each transaction. This is information that is not stored on the blockchain, like your exchange details, so that it's not lost if your computer crashes. And that's the only information we store about your wallet; no identifying or personal data. We do not store your private keys. Your private keys are generated on your local machine and remain there. Your metadata is encrypted with your password, so no one at Exodus can see it. 

Okay, now let's take a deeper look.

12-word Seed

Your 12-word phrase is the most important piece of information. All your Private Keys that ultimately control your assets are all mathematically derived from your 12-word seed, meaning they alone will give full access to your wallet to anyone that has them! And as long as you (and only you) have those, you can restore your wallet under any circumstances! For both of these reasons, it is very important that you keep them safe and secret. Here's how to do that:

  • Write them on a piece of paper.
  • Keep that piece of paper secret.
  • Do not take any screenshots of them.
  • Do not store them in any electronic form. Especially a cloud service like Gmail/DropBox/EverNote!
  • Make sure you have their order and spelling right

Your 12-word phrase is meant to be kept hidden and used only as a last resort.


Your password is extremely important too. It encrypts your Private Keys on your computer. While your wallet is closed, your Private Keys are encrypted and no one can access them on your computer and send out your funds. 

Note: The email backup link is only applicable to wallets downloaded before version Version 19.2.1

If you created an Email Backup (an option in versions of Exodus pre-Version 19.2.1), your password can also restore your wallet combined with the backup link you received in that email. For this reason, you must secure your email with 2FA and use a random, strong and unique password that you don't use anywhere else. A password manager is a great tool to create and remember such a password. Otherwise, if your email is breached,someone else might restore your wallet and gain access to your coins. 

Finally, two more things about your password: 

  • Don't lose it because it can't be recovered. If you do, you'll have to use your 12 words to restore your wallet. 
  • If you ever suspect that your password or email may have been compromised and you have created an email backup, you need to create a new wallet.

The backup link is a copy of your 12-word seed but encrypted with your password. This means that the link by itself is useless without the password to decrypt it. This also means that anyone with access to your email account AND your login password will have full control of your assets. This is why adding 2FA protection to your email account is so important. 

If you created a backup link, it is your second restore method in case something happens to your 12 words. 

Finally, one last important thing. As we mentioned, Exodus is not a centralized service, but a software wallet that keeps all your information locally. This means that Exodus is  only as secure as the computer it is running onIf you use pirated software, download pirated media, don't exercise safe browsing, or store your 12-word phrase in a text file on your computer or email, then you could become an easy target. But if you practice good security, you are arguably safer than having funds on a centralized service. Think of it this way: You could have a car with a great security system, but if you park it in a bad neighborhood and leave the keys on the hood then it will probably get stolen. But if you make sure to lock your doors every night and park in the garage, you're much safer. 

Want to learn more about how to secure your wealth? Have a look at our comprehensive security guide:

Got questions, suggestions or concerns? Don't hesitate to reach out: support@exodus.io