What is a seed phrase?

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By PrimeXBT

Reviewed by Dirk Hartig

July 19, 2022
Reading Time: 7 min
What is a seed phrase? - What is a seed phrase

If you hold crypto for any time, you will eventually come across the term “seed phrase.” The seed phrase is integral to keeping your crypto safe and away from the hackers that would love to steal it. 

What is a Seed Phrase? – Definition & Meaning 

A seed phrase is a group of random words generated by your crypto wallet when you first set it up. It should be considered a “master key” to your wallet and everything inside it. There are multiple types of wallets that you can use, but they all have the seed phrase as a major feature. 

What the seed phrase is used for is to populate a new wallet. For example, if you lose your hardware wallet, you can buy another wallet and use the seed phrase to verify the ownership of a blockchain address. This proves that you are the cryptocurrency’s owner, allowing it to show up in your new wallet. There is nothing but private keys and digital proof of ownership on the wallet; the actual “coins” are stored on the blockchain. This allows for recovery via a new wallet, meaning that you always have access to your funds as long as you have access to the seed phrase. 

Seed Phrase Example 

Seed phrases work the same way on any wallet. If you use a wallet to store your cryptocurrency that does not ask or prompt you to create a seed phrase, it will serve you to move to a reputable wallet. 

The number of words used to generate a seed phrase will vary. Still, one of the most popular hardware wallets, meaning a wallet that is physical and not connected to the Internet, Trezor has 24 randomly generated words. 

As an example, your seed phrase may look like the following: 

basedeerimage
closedepartbargain
invitecelerybrick
gapablecaught
featurebottlehair
emptyacrossdeposit
barelyanymagic
boatbeginlawn

If you were to lose your wallet and be forced to purchase another one, these words would have to be put into the next wallet you bought, in the exact order. Once that happens, your ownership of the digital assets is confirmed, and you should see them appear in your wallet. 

If You Lose Your Recovery Phrase, You Lose Your Crypto 

One of the biggest concerns that you should have is keeping your recovery phrase (seed phrase) safe. If you were to lose your seed phrase, you would lose all access to your crypto. It remains on the blockchain, assuming that somebody else did not steal your phrase, but you will have no access to it. 

Because of this, you must keep a copy of your seed phrase someplace safe, perhaps in a safety deposit box or a fireproof safe. That said, you should never let your seed phrase be publicly accessible and never put it online. You should treat your crypto wallet as a real wallet and assume that giving out or losing your seed phrase is the same as throwing your wallet with all your cash on the ground.

Can Someone Guess My Seed Phrase? 

Let’s take a look at a crypto seed phrase. In this scenario, it is just 12 words. People would assume that it should be relatively easy to guess a seed phrase, but you should understand that there are 2048 unique words in the potential word list. Guessing a 12 words seed phrase, which also has to be in the correct order, is the same as correctly guessing a number between 1 and 5,444,517,900,000,000,000,000,000,000,000,000,000,000,000. 

How Does a Seed Phrase Work? 

When you create your wallet, a recovery phrase is automatically generated. (It should be noted by now that the term “seed phrase” and “recovery phrase” are synonymous.) The phrase represents a long string of random numbers written out in recognizable symbols for human consumption. It allows the wallet to generate the private keys that let you send and receive crypto. 

  • Human beings are much more adept at working with words than random long strings of numbers, which is why the phrase is written out in words. That being said, you should not rely on your memory to store your recovery phrases.
  • The recovery phrase is pulled from a list of 2048 simple words. This was all widely adopted after the Bitcoin Improvement Proposal 39, established in 2013.
  • By having an adopted standard, it makes all major while it’s inter-compatible. If you want to switch wallets, you just need to enter your recovery phrase into the new wallet in your crypto will be available there.
  • If you were to lose a hardware wallet or delete a wallet, you can re-create it using your recovery phrase alone.
  • Keeping your recovery phrase safe and private is critical for anyone holding crypto.

What is a Seed Phrase Passphrase? 

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A seed phrase “passphrase,” also called a “seed extension” or “extension word,” is the 13th or 25th word that you can specify yourself on top of the randomly generated 12 or 24 words for your wallet. They’re not necessarily commonly used, but it does add an additional layer of security, with the same caveat as the original phrase, if you lose it, you lose your crypto. 

That being said, the security offered by the original seed phrase should be more than enough for most crypto enthusiasts. However, know that this option is available if you choose to use it. 

How to Use a Bitcoin Seed Phrase 

Using a seed phrase is relatively straightforward. For example, you may have lost your hardware wallet and wish to track down your crypto. All you will have to do is get a new hardware wallet and import the original seed phrase. The software inside the wallet will then restore your previous balances as you can recover your private keys from the blockchain. 

This can be used for multiple reasons, not the least of which somebody has lost their wallet, had a web wallet and deleted the browser, or had a software wallet that suffered some type of malfunction due to a computer error or simply buying a new computer. 

What is BIP39? 

BIP39 stands for “Bitcoin Improvement Proposal: 39”, which allows for a master seed, wallet backup, recovery phrase, and a mnemonic seed. BIP39 allows using a mnemonic phrase, or a grouping of words, to serve as a backup for the private keys to a particular wallet. The words come from a specific list of 2048 words called the BIP39 word list. 

BIP39 is the standard of most of the popular wallets that crypto holders use, and as a result, if you are switching types of wallets, quite often, you can use the seed phrase from one to recover your coins and use the other. As long as they both support BIP39, you can go back and forth quite easily.

How Can You Store a Seed Phrase Safely? 

You can protect your seed phrase in numerous ways, and it comes down to what is available to you. That being said, a few ideas might include: 

  • In theory, you could split up your seed phrase into multiple parts and deposit each part in a safety deposit box. This would be a huge hassle, but it is a way to keep it as safe as possible.
  • Some people will engrave their seed phrases in substances like stainless steel, ensuring there is no way to destroy the phrase. However, you still need to store it somewhere out of the prying eyes of others.
  • Most people simply write the phrase down a couple of times and store it in safe places if it’s ever needed. A fireproof box or safe makes an excellent option.
  • If you use a mobile wallet, sometimes the wallet will offer a backup on Google Cloud or some other cloud-based service to protect your seed phrase.

How is a Seed Phrase Different from a Private Key? 

Each crypto wallet contains two main codes: private and public keys. The public key is used for receiving transactions or people sending crypto to you, and the private key is used for sending crypto to others. 

A seed phrase is best thought of as a backup to the private key for a wallet. The seed phrase enables a wallet to derive your private key. A private key to a cryptocurrency while it is the same as an ATM personal identification number to a bank account. Each bank account has a unique PIN, proving to the bank that the account owner is requesting money. Just like a debit card, if somebody has access to your private keys, they can pull money, or crypto, out of your wallet. 

A private key is a 256-bit number which is a random number between the values of 0 and 115,792,089,237,316,195,423,570,985,008,687,907,853,269,984,665,640,564,039,457,584,007,913,129,639,936. In other words, it’s all but impossible to crack the code. Developers have developed a mnemonic code on top of this so that users would not have to type in all these massive numbers every time they want to use their wallets. 

What Are the Advantages of Seed Phrase? 

Hopefully, you will see the advantages and necessity of using a seed phrase. There are a couple of reasons to consider why it might be advantageous. 

  • Immunity to both online and offline attacks
  • Seed phrases are free
  • Offers the ability to change wallets due to loss, deletion, or simply a desire to buy a new one
  • Having the seed phrase allows you to prove ownership of crypto no matter what happens

What Are the Disadvantages of Seed Phrase? 

While there are numerous reasons to use a seed phrase, there are a few disadvantages, albeit minor. 

  • You need to protect your seed phrase at all costs
  • Can be burdensome to remember
  • Users do not choose the seed phrase themselves
  • Can be difficult to change if necessary

Can You Change an Existing Seed Phrase? 

Changing an existing seed phrase is possible, but it’s not the same thing as changing a password for an online account. You change your seed phrase by generating a new one and then moving your assets to the address governed by it. 

Seed phrases ultimately allow you to unlock funds and spend them from your address. If your seed phrase becomes compromised, you must move funds to another address that has not been compromised to regain control of the crypto.

Conclusion 

In conclusion, you should see that seed phrases are crucial. It’s almost impossible to get a wallet that doesn’t generate one. As you have this added layer of protection, you might as well use it. Furthermore, if you choose not to use a seed phrase, it’s possible that you could lose control of your crypto altogether. 

Keeping your crypto and the seed phrase protected should be the most important thing you spend time on. You should think of it as the same thing because if you lose your seed phrase, you will not have any crypto. If it gets stolen, people out there will gladly empty your wallet of all of its assets. 

Keep in mind that once crypto is gone, it’s gone. It cannot be stressed enough about the importance of not only writing down the phrase but keeping it out of the view of prying eyes. You should never put it online, and you should always have it in a place that is safe from damage. Furthermore, you should have a couple of copies just in case. 

FAQ: Frequently Asked Questions

What is an example of a seed phrase?

An example of a seed phrase would be a collection of 12 or 24 words from the BIP39 list of 2048 approved words. These are words such as “bottle, across, and any.”

How many words is a seed phrase?

A seed phrase is either 12 or 24 words, depending on the wallet that you’re using.

How do you find the seed phrase?

It is generated for you by the software included with whatever wallet you choose to store your crypto.

How do I use my seed phrase?

When you change wallets or replace one that has been damaged or deleted, you simply enter the 12 or 24-word phrase in the same order, proving ownership of the private keys for the crypto you held. At that point, the crypto should reappear in your new wallet.

Is a seed phrase the same as a private key?

Kind of. The seed phrase should be considered a “backup” to the private key, proving ownership. While not technically the same thing, the seed phrase is what humans use instead of the arduous task of typing in thousands of digits.

How long would it take to crack a 12-word seed phrase?

It is practically impossible to crack a 12-word seed phrase. Furthermore, most wallets have a backup feature that if there are enough failed attempts, the wallet itself will lock everybody out. You must buy another wallet and enter the phrase to recover your crypto if you are the legitimate owner. Think of it as a “failsafe method.”

How do you access crypto with a seed phrase?

You access crypto with a seed phrase by entering it into a wallet, proving crypto ownership. As long as the wallet follows the BIP39 protocol, your seed phrase should work with it, regardless of the manufacturer.

How many seed phrases are possible?

Using a 12-word seed phrase, it is possible to have as many as 777,788,267,247,859,345,059,141,959,844,041,626,185 phrases.

Risk Disclaimer
Investing in or trading gold or other metals can be risky and lead to a complete loss of capital. This guide should not be considered investment advice, and investing in gold CFDs is done at your own risk.
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