What is a seed phrase?

Updated July 23, 2024 at 12:12 pm

Learn

Crypto seed phrases aren’t specific to any particular cryptocurrency; rather, they serve the same essential purpose: acting as the final safeguard for a crypto wallet. The write-up explains everything you need to know about seed phrases in detail.

What is a seed phrase? Seed phrase explained

What is a seed phrase meaning? A seed phrase, also referred to as a recovery or backup phrase, is a record of randomly generated words with all the requisite data required for one to recover funds from a crypto wallet on-chain. Typically, it is generated by crypto wallet software, and users are advised to note it down somewhere secret in case their computer crashes. In such cases, a seed phrase is handy as one can download the same wallet software and use it to get their coins back.

How does a seed phrase work?

Each crypto wallet generates recovery phrases of 12 to 24 words whenever a user completes the setup process. As indicated earlier, these words are randomly chosen from a word list, and a user is always advised to record them in sequential order. Most wallets recognize and use the BIP39 standard.

To use a seed phrase, users must select the option to restore using a recovery phrase on their wallets. Once this is done, the wallet provides the user with a chance to enter their seed phrase. Upon entering the seed phrase correctly, users regain access and control of all the crypto assets in their wallets.

How to generate a seed phrase

The first phase of generating a seed phase is entropy. Entropy is simply the lack of order or predictability. It entails developing random data from a random source, making it nearly impossible for third-party hackers to crack. Since entropy measures how random a data set is, it must fit certain parameters before generating a seed phrase. Mostly, the data must be divisible by 32 and should be between 128 and 256 bits of entropy. For instance, a 24-word seed phrase is mapped by 256 bits of entropy.

Afterward, the random data is run through the SHA256 hash function, which turns the data into a verifiable result known as the checksum. It is worth noting that the hash function gives the checksum in the hexadecimal format, which must be converted into binary for a seed phrase to be generated. For this to happen, the checksum result is segmented into 11-bit lumps of data that map words from the BIP39 word list.

How to safely store a seed phrase

A seed phrase is the most crucial component of every crypto wallet. It is the last safety line for all the assets stored in a wallet. Losing it means bidding goodbye to whatever one has saved in the wallet. Additionally, a wallet may be wiped clean if the recovery phrase falls into the wrong hands. It is, therefore, common knowledge that safeguarding a seed phrase is paramount. Below are a few ways in which one can achieve that.

The cheapest method used to protect a seed phrase is by writing it down and keeping it in a safe place. When doing so, users are advised to keep more than one copy of the recovery phrase in different locations.
When protecting seed phrases, it pays off to invest in safety deposit boxes.
Engraving seed phrases in durable materials that are fire-proof and beyond reach from online hackers is another way to protect them. Stainless steel is most commonly used.
‘Brainwallet’ is still popular among some people today. Although it may be unreliable, memorizing a seed phrase and keeping it in one’s head is a reliable way of protecting it.

In addition to the seed phrase protection methods mentioned above, there are some other guidelines that a user should follow to guarantee the absolute safety of seed phrases. They are.

Don’t store a seed phrase on the internet.
Never allow anyone access to your seed phrase; keep it private
Don’t give out a seed phrase to any online application without performing a background check
Never take a photo of the seed phrase
Most importantly, never lose the seed phrase

What does an average seed phrase look like? Seed phrase example

As noted earlier, most seed phrases have 12 to 24 words, all written in order from left to right. These words are randomized but simple, and they can be words like ‘rich,’ ‘man,’ ‘dog,’ ‘lady,’ etc., all gotten from the BIP36 wordlist of 2,048 words.

The main reason why a seed phrase uses words instead of letters and numbers is that it is easier to write down words correctly with minimal room for human error. Additionally, the chances of a hacker using brute force to decode a 12 or 24-word seed phrase are quite low. Here is a typical twelve-word seed phrase example.

“technical ideology dispute university medicine elevator kite heart man cat impudent car.”

Risks associated with seed phrases

Securely storing the seed phrase continues to be the main challenge. Experts recommend not relying solely on memory; a completely foolproof method has yet to be devised. Please follow the recommendations provided above to keep your seed phrase secure.

When to use a seed phrase

Seed phrases aren’t necessarily used during day-to-day access to crypto wallets. Accessing a wallet only requires one to enter a pin they have set, and using a seed phrase is only required on the following occasions.

When generating a wallet
In cases when a wallet application has been deleted
When restoring a wallet
Whenever a wallet has been lost

How to recover a wallet using a seed phrase

If you ever find yourself in a spot where you can’t get into your cryptocurrency wallet, don’t panic!

Get the official wallet app directly from the developer’s website.
Look for an option such as “Recover wallet”.
Carefully enter your seed phrase exactly as it appears, including the correct order and capitalization. Take your time to ensure accuracy.
Choose a new password to access the wallet. Once you’ve entered it, confirm the password to continue with the recovery process. This ensures your wallet remains secure while you regain access.

Seed phrases vs private keys

What is the difference between a seed phrase and a private key? Is a private key the same as a seed phrase?

Seed phrases and private keys are integral to the security of cryptocurrencies. They act as passwords that authorize users’ access to their blockchain. Although they have their similarities, they aren’t the same. One has access to a single address with private keys, whereas a seed phrase gives access to a wallet with multiple addresses. A seed phrase acts as a master key in case wallet details are lost, and with it, one can recover accounts.

FAQs

What is a Seed Phrase?

A seed phrase is similar to an API key, except that it provides a unique identifier for your crypto wallet. You should create one when setting up your crypto wallet because it allows you to recover your funds if they become lost. You cannot access your cryptos if you lose your private keys. To protect yourself against loss of digital assets, store a backup of your seeds on a secure device.

What are crypto Private Keys?

Crypto Private Keys are sensitive data such as passwords, PIN codes, and keys. They should be stored separately from your regular computer files due to the possibility that they may be stolen if the wrong person gains access. If you use a password manager like Dashlane, you don’t need to worry about losing your crypto key. However, if you store them in plain text anywhere else, make sure you keep your wallet file backed up securely offline.

Is Blockchain technology secure?

Yes, blockchain has been praised for its security and has become one of the hottest topics in the financial industry. Three main characteristics make blockchain secure: decentralization, immutability, and transparency. Decentralized networks are built using cryptography, meaning data cannot be altered once published. Immutable records mean that transactions recorded on blockchains cannot be changed by anyone other than those who made them. Transparency enables users to verify transactions and access any information stored on the network.