What Is a Seed Phrase? (Secret Recovery Phrase)
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We believe in full transparency with our readers. Some of our content includes affiliate links, and we may earn a commission through these partnerships.Understanding how seed phrases work is paramount when storing cryptocurrencies. Typically 12-24 words, seed phrases allow users to recover access to a wallet. If you forget the PIN or lose the respective device, this might be required.
Read on to learn how a wallet seed phrase functions, why they’re important, and how to generate one yourself. We also discuss best practices when keeping seed phrases private and secure.
What Are Seed Phrases?
Let’s start with the basics – what is a seed phrase? We’ll answer this question by explaining the three crucial components of a crypto wallet.
First, there are public addresses, which are used when receiving funds. Second, there are private keys. These are a long string of alphanumeric characters, and they’re unique to the wallet. Private keys are needed when signing transactions, although they can also be used to recover a wallet remotely. Third, there are seed phrases (also known as a secret recovery phrase).
Just like private keys, seed phrases allow users to recover a wallet. For instance, if the wallet’s PIN is forgotten or the respective device is lost or damaged. Seed phrases are a lot more user-friendly than private keys, as they’re often 12-24 words. In contrast, private keys typically consist of 64 characters, including upper/lower case letters and numbers.
Therefore, seed phrases make it simple to access a wallet when needed. Crucially, seed phrases must never be shared. Anyone with access to the seed phrase can also access the wallet. This is why hackers are constantly on the hunt for seed phrases; methods include phishing, impersonation scams, SIM swaps, and viruses.
How Do Seed Phrases Work?
Seed phrases are an integral part of safely storing cryptocurrencies in a wallet. Most crypto wallets – whether they’re software or hardware-based, require users to write down their seed phrase when getting started.
- For instance, suppose you’re using Trust Wallet on a mobile app.
- Users are shown 12 random words, which must be written down in the correct order.
- This is the user’s seed phase.
- Trust Wallet then asks users to reenter the 12 words.
- This ensures the seed phrase was written down correctly.
Users are advised to keep their seed phrase somewhere safe. This must be offline, such as on a sheet of paper. Otherwise, if the seed phrase is stored on a device with internet access (e.g. on Google Docs or an email), it can be hacked remotely.
It’s important to know that seed phrases are only needed in certain situations. Put otherwise, seed phrases are only required if you lose access to your crypto wallet.
For example:
- If you forget the PIN or password to the wallet
- If you lose the device the wallet is stored on, such as a smartphone or laptop
If one of the above circumstances happens and you’ve lost the seed phrase – you won’t be able to recover the wallet funds. This means the wallet contents will be lost forever. This highlights the importance of keeping seed phrases safe.
What Is The BIP39 Standard?
The Bitcoin Improvement Proposal 39 (BIP39) created a simplified way of recovering access to a Bitcoin wallet. Before BIP39, wallet recovery required the full private key.
Here’s an example of what that would look like:
- e8b9e64cd7c2a7b7dc5e812340afc752fd7b9895d79217d5d07d7b4d91ce98a5
The above private key not only contains 64 characters but it’s mixed between upper and lowercase letters, plus numbers. Writing down just one character incorrectly means the private key is invalid. As such, the BIP39 standard ensured that private keys were more user-friendly and readable.
So, many wallets use the 12-word Bitcoin seed phrase format, which could look like this:
- Hello
- Acquire
- Turn
- Royal
- Enable
- Should
- Hat
- Hand
- Right
- Segment
- Poet
- Fabric
Just like private keys, seed phrases must be entered in the correct order. That said, there are no upper/lowercase variations. Do note that some wallets have 18 or 24-word combinations, which further increases security. What’s more, it’s not just Bitcoin wallets that use seed phrases. Virtually all wallets use them, including those supporting the best meme coins.
Private Key vs. Seed Phrase in Simple Terms
- Private keys are long alphanumeric passwords that are unique to crypto wallets. They’re embedded into the wallet, allowing users to sign crypto transactions remotely.
- Private keys are also used for wallet recovery. For instance, if the user forgets their PIN.
- However, private keys are long, meaning they’re far from beginner-friendly.
- As such, seed phrases are human-readable versions of the private key.
- This is because seed phrases are a string of words, so they’re easier to write down and reenter.
Most Common Uses of Seed Phrases
Seed phrases are used for multiple applications, either directly or indirectly. Let’s take a closer look at each use case.
Cryptocurrency Wallets
The best crypto wallets use seed phrases as a recovery method. As mentioned, they’re considerably more user-friendly than private keys. Software wallets display the 12-24 word seed phrase when getting started. Hardware wallets often display the seed phrase on a small digital screen.
That said, some wallets use alternative methods when securing funds. For example, Zengo uses multi-party computation (MPC) security, meaning private keys are split and stored on individual and unconnected servers. Moreover, Zengo uses three-factor authentication for wallet recovery, including facial recognition and cloud storage.
Another exception is custodial wallets, which are offered by crypto exchanges. Custodial wallets are controlled by third parties, so you won’t receive the seed phrase or private keys. Instead, access is secured via login credentials and two-factor authentication.
Password Managers
While password managers don’t technically use seed phrases, they use a similar system. Put simply, password managers allow users to store multiple passwords for each application, such as email and banking accounts.
Users are assigned a ‘Master’ password, which is needed to access the password manager. Moreover, the user will have a randomly assigned ‘Salt’ added to the end of the master password. This ensures that passwords are encrypted.
Decentralized Applications (dApps)
Non-custodial wallets are required when accessing dApps, such as decentralized exchanges and lending platforms. Although seed phrases aren’t needed when connecting with dApps, they are for wallet recovery.
- For instance, let’s say you previously deposited 4 ETH into an Aave staking pool.
- You verify the transaction via your private wallet. A smart contract is generated, which ensures the staked funds are safe.
- You then disconnect your wallet from Aave for increased security.
- A few months have passed and you want to unstake the 4 ETH from Aave.
- However, you can’t remember the PIN for your wallet, which is needed to authorize the transaction.
- In this instance, you’d need the wallet’s seed phrase to recover access.
- You can then unstake the ETH from Aave, meaning it’s transferred back to the wallet.
Crucially, you wouldn’t be able to regain access to the wallet without the seed phrase. In turn, that 4 ETH would be locked in the smart contract indefinitely.
How to Generate a Seed Phrase
We’ve helped answer the question – what is a seed phrase? Next, you’ll want to know how to get started. Generating a seed phrase is a simple procedure. It’s typically part of the wallet setup process.
Let’s use MetaMask for our walkthrough, which is considered one of the best decentralized crypto wallets.
First, users must download MetaMask to their preferred device. We’ve opted for the browser extension but it’s also available as an iOS/Android app.
Next, create a strong password. Reenter the password and proceed to the next step.
MetaMask will now display the 12-word seed phrase, which is unique to the wallet. Write this down on a sheet of paper.
You’ll then be asked to reenter the MetaMask seed phrase in the correct order. This ensures you’ve written it down correctly.
And that’s it – you’ve just created and secured a seed phrase.
Note: The above seed phrase was created for this guide. It doesn’t belong to an active wallet.
Can You Create a Custom Seed Phrase?
Very few wallets allow users to create their own custom seed phrases. This is because of entropy, meaning the chosen words might have decreased randomness, as they could be personal to the user.
Although it’s not recommended, Electrum supports custom phrases.
Here’s how:
- Download Electrum to your preferred device
- Create a new wallet and select ‘I already have a seed’
- Type in the words for your custom seed phrase
- These must be words from the BIP39 standard, which covers 2048 words
If you do proceed, consider using a seed phrase generator. This will randomly generate words for your seed phrase.
How to Safely Store Your Seed Phrase
Finding the perfect balance between security and accessibility is crucial for crypto seed phrase storage. At a minimum, you must keep the seed phrase offline, meaning away from devices that can be connected to the internet.
For example, writing the seed phrase on a Google Doc file would mean it’s vulnerable to hackers. Instead, consider writing it on a sheet of paper, and keeping it somewhere safe. You could even write it on a metal plate via engraving, ensuring it is resistant to fire and water damage. Never use a third party if opting for this option.
Splitting the seed phrase in multiple locations can offer increased security. For instance, you could keep half of the seed phrase in a safe at home. And the other with a trusted family member. However, you’d want to consider duplicating the process, in case one location is no longer accessible. Make sure each location is easily accessible.
Do note that scammers have developed multiple methods to obtain seed phrases. While they can’t access your seed phrase remotely if it’s kept offline, they can use deceptive strategies. For example, scammers create imitation websites of popular wallet providers. Victims believe they’re speaking with an official support representative, but it’s actually the scammer.
The scammer might ask for the seed phrase as a verification method. Giving it to them will result in your wallet being drained. Therefore, ensure you never share the seed phrase with anyone – no matter the circumstances.
Note: If your crypto does happen to get stolen, report the event to your local regulatory bodies and potentially hire a crypto recovery service company.
How to Recover a Wallet With a Seed Phrase
The reality is that most people never need their seed phrase. However, there will be circumstances where it’s required for wallet recovery. A common example is that the device storing the wallet is lost, damaged, or stolen. Another example is the wallet’s PIN or password is forgotten.
Here’s what you need to do in either of these circumstances:
- First, you’ll need to download another wallet. This doesn’t need to be the same wallet provider, but doing so keeps things consistent.
- Rather than creating a new wallet, click the button that says you’ve already got one.
- You’ll then be prompted for the seed phrase – type it in
- The cryptocurrencies can now be accessed via the new wallet
Conclusion
In summary, seed phrases allow users to recover a crypto wallet. They’re required in certain situations, such as losing the device the wallet is stored on or forgetting the PIN. Most seed phrases are 12 or 24 words, so they’re easy to manage.
However, beginners should remember that seed phrases represent the wallet’s private keys, so should never be shared. What’s more, seed phrases should always be kept offline – such as on a sheet of paper.
FAQs
What is a seed phrase example?
A seed phrase example is 12 random words, such as horse, lane, tree, keyboard, time, green, purpose, lounge, ending, trust, can, broke.
What is a 12-word seed phrase?
A 12-word seed phrase is 12 randomly generated words that must be entered in the correct order. This enables users to recover access to a crypto wallet.
What words are in a seed phrase?
As per the BIP39 standard, 2048 words are available when creating seed phrases.
How hard is it to crack a seed phrase?
Yes, it’s virtually impossible to crack a seed phrase, owing to the sheer number of possible combinations.
How many words should a seed phrase contain?
Most seed phrases contain 12 words. However, increasing this to 18 or 24 words offers enhanced security.
What happens if you forget your seed phrase?
If you forget the seed phrase and no longer have the wallet PIN or password, you won’t be able to recover the funds. This is why keeping seed phrases somewhere safe and accessible is paramount.
References
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Camila Karam 
Eric Huffman 
Ihssan El Medkouri 
Connor Brooke