Crypto Basics: What is a seed phrase? Why recovery phrases are secure

What is a seed phrase?

A seed phrase, also known as a recovery phrase, is a sequence of words that allows you to recover your cryptocurrency wallet.

Depending on the type of wallet, other names used for the seed phrase are:

  • seed words
  • recovery words
  • secret recovery phrase (used by MetaMask)
  • seed (used by Electrum)
  • mnemonic seed/phrase
  • backup seed/phrase

They all refer to the same thing.

You usually use it to restore your crypto wallet in case you lose access to it. So you might use this phrase to recover your wallet in the event that you misplace it, damage it, lose it to theft, or it becomes otherwise inaccessible.

Or, you simply wish to use your wallet on another device, then you use the seed phrase to restore your wallet on a new device. In this way, you never actually need to transport your crypto wallet when moving locations or using a new device.

What does a seed phrase look like?

The seed phrase of today's wallets typically contains 12, 18, or 24 random words. 

A recovery phrase is essentially a human-readable form of your wallet’s private key used to sign transactions and claim ownership of your wallet addresses.

When you create a crypto wallet, the first thing you should do to safeguard your funds is to write down your seed phrase and keep it in a safe place.

It's not recommended to save your seed phrase as a screenshot or store it online. The best thing to do is to write down the sequence of words on a piece of paper that you store in a safe place in your home. Because paper is vulnerable to damage from moisture, heat, and other physical elements, some choose to engrave on metal for better protection from the elements.

If you lose your seed phrase, you also lose access to your funds. There is no possibility to recover a seed phrase through a 3rd party so make sure to secure it well.

Are seed phrases really secure?

In short, yes. A seed phrase is very secure. The chances of a hacker guessing your seed phrase are essentially zero. This is because the sheer number of possible combinations of words in a seed phrase is so big that even the fastest computers used to crack passwords would take thousands of years to guess it.

Why is this so?

In summary, a 12-word seed phrase from a list of 2,048 words provides 128 bits of entropy. This means that the number of possible combinations comes out at 2048^12 = 2^132, which translates to 2,000,000,000,000,000,000,000,000,000,000,000,000 different combinations. That’s 2 trillion x 1 trillion x 1 trillion!

A 24-word seed phrase provides 256 bits of entropy, and contains an astronomical amount of different combinations.

In short, a 12-word seed phrase provides us with more than enough security to know that our crypto is safely locked away in our wallet. That said, it's impossible to predict what the future holds in terms of super-computers that hackers can use, so to stay ahead of what the future may hold, it might be a good idea to use the 24-word seed phrase when possible.

How are seed phrases determined?

One of crypto’s features is something called BIP39. BIP stands for Bitcoin Improvement Proposal. BIP39 was a Bitcoin feature that proposed utilising a mnemonic phrase (mnemonic means easy to remember) to back up a crypto wallet. It creates a high amount of entropy, which results in a high level of security.

The BIP39 formula generates a list of 2048 words that can be combined to create a unique seed phrase. It uses a combination of mathematical algorithms and randomness.

The order of the words in your seed phrase matters and the words themselves come from the specific wordlist known as the BIP39 word list consisting of 2048 commonly used words. 

Not just any 12-24 words from the BIP39 list will work. There is a specific structure required based on the BIP39 standard for a valid seed phrase.

Can you use your own word as a seed phrase?

In some crypto wallets, it`s possible to make a seed phrase in your own words, but this is by no means recommended unless you are an advanced user and know exactly what you are doing. There are many steps required to create a seed phrase securely and requires the use of a computer aide. 

This is why it's much easier and safer to generate your seed on a device that has access to the necessary functions and is already in a secure environment.

If you want to keep your funds as safe as possible then the best idea is to let the wallet choose the seed phrase for you.

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