Security Architecture and Best Practices

Security in a non-custodial environment is a shared responsibility. The Coinbase Extension provides advanced architectural protection, but the user is the final, and most critical, security layer. Understand these components for ultimate asset protection.

Local Key Storage

The private keys are stored exclusively on your device (client-side), heavily encrypted and secured. They never leave the local environment, and Coinbase's servers never have access to them. This critical design choice eliminates the risk of a mass centralized hack compromising your funds.

Seed Phrase Protocol

This 12-word phrase is the master key to your entire wallet. It is the only way to restore your wallet on a new device. Its protection is absolute.
Best Practice: Never store the phrase digitally. Write it down on durable material (paper/metal) and store it in multiple secure, offline locations (e.g., safe deposit box).

Isolation and Injection

The extension runs in an isolated browser environment. When you interact with a dApp, the wallet injects the transaction request for signing. The dApp only receives your public address; the private key remains locked within the secure, encrypted extension container.

Hardware Wallet Compatibility

For substantial holdings, pairing the software wallet with a physical hardware wallet (Ledger, Trezor, etc.) is the highest standard. The extension acts as the interface, but the private key *never* leaves the physical device, requiring a manual confirmation to sign transactions.