In such cases, you should just find the seed phrase in the wallet interface and store it securely. A seed phrase is not the same as a private key, but they grant access to your crypto together. A private key is a code that secures your transactions automatically by proving your ownership of the crypto. When a wallet generates your seed phrase, it will most likely direct you to write down the phrase and store it in a safe place. Pencil and paper work fine, though some investors inscribe their seed phrases onto a fireproof metal container or card.

• You should learn about crypto fundamentals and the best practices for crypto security for using the seed phrase effectively.
• Seed phrases can serve as the last line of defense preventing you from losing access to your crypto in the event something happens to your device or hardware wallet.
• One interesting fact about seed phrases and BIP39 is that, given the 2048 words chosen for the list, only the first four letters really matter.
• Just like a debit card, if somebody has access to your private keys, they can pull money, or crypto, out of your wallet.
• They both should be safeguarded with equal rigor, however, as anyone with access will be able to create a copy of the corresponding wallet or drain if of its funds.
• Because unlike online banking, there isn’t tech support available to verify identity and restore access.
• If something were to happen where you lost access to that wallet (e.g., forgetting your login credentials), there would be no way for you to recover those Bitcoins without the private key or seed phrase’s help.

Seed phrases are randomly generated clusters of words used by cryptocurrency wallets and serve as a crucial component for accessing private keys and recovering lost or forgotten passwords. A seed phrase, seed recovery phrase or backup seed phrase is a list of words which store all the information needed to recover Bitcoin funds on-chain. Wallet software will typically generate a seed phrase and instruct the user to What is a Seed Phrase write it down on paper. If the user’s computer breaks or their hard drive becomes corrupted, they can download the same wallet software again and use the paper backup to get their bitcoins back. Your seed phrase is a string of words that stores all the information needed to recover your wallet. “Seed phrase” is sometimes also referred to as mnemonic seed, mnemonic phrase, recovery phrase, or backup seed phrase.

What Is A Seed Phrase?

One of the most widely-used standards for seed phrases is BIP39 (Bitcoin Improvement Proposal 39). And while it was initially proposed for bitcoin wallets, it became a popular standard across the board. It outlines how crypto wallets generate the phrase and reinterprets each word for wallet recovery. The primary highlight in every seed phrase example and guide would focus on its capabilities for recovering crypto wallets.

You can think of the Secret Private Key Recovery Phrase as your “master password” for all of the crypto in your Blockchain.com wallets. Because of the non-custodial structure of our Private Key Wallet, we never store or have access to your Secret Private Key Recovery Phrase. Within the Blockchain.com app, you’ll have multiple Private Key Wallets; as a simple example, if you hold BTC and ETH, you’ll have two Private Key Wallets, resulting in two seed phrases (one for each wallet).

If You Lose Your Recovery Phrase, You Lose Your Crypto

While this protects the phrase from online threats, it can easily become unreadable over time through natural wear and tear. For this reason, some use a prefabricated metal plate, also called a seedplate, with an etched version of the seed. But if they are stored in the same location of the wallet, they become subject to the same risks such as fire, natural disasters and theft. The definition of the seed phrase creates interest in how it works in practice. Crypto wallets work in a different way than the physical wallets you carry for storing cash and cards.

• NerdWallet, Inc. is an independent publisher and comparison service, not an investment advisor.
• We believe everyone should be able to make financial decisions with confidence.
• 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.
• And even if a user takes every precaution to protect the seed phrase, their wallet can still be hacked if it is not entirely offline and air gapped from any bluetooth connections.
• For those prioritizing high security, especially in scenarios involving significant amounts, manual generation methods like calculators and dice offer a more controlled approach.
• It’s not just enough to have backups; you must regularly review and update how you store your seed phrase.

Computers crash, phones get smashed, and hardware wallets can be lost, stolen or destroyed. Should such an unfortunate circumstance befall you, you will be very glad to have your seed phrase safely tucked away. The seed phrase is essentially the master key that grants access to your crypto wallet. If someone gains access to your seed phrase, they can control and transfer your crypto assets.

BIP39 and its flaws

Users can access their crypto wallets by using the private key, which confirms their address. There are many types of crypto wallets, such as web-based or hardware wallets. Seed phrases are generated any time you create a new hierarchical-deterministic bitcoin wallet, and that applies to both software wallets like Blue Wallet, and hardware wallets like Ledger, Trezor, and Coldcard. You should then secure this seed phrase for safekeeping in case you ever need to recover your wallet, at which point you would use these words for that purpose. Through bitter experience it has been found that one of the most practical storage media is pencil and paper.

It is also known as a mnemonic phrase and is best understood as a security measure for self-custodied digital assets. Another common choice for storing seed phrases https://www.tokenexus.com/ in crypto wallets would refer to engraving on metal. It is a comparatively new backup option with the assurance of better longevity in comparison to paper.

Therefore, you need to rely on the seed phrase generator of the wallet itself. Most modern software wallets automatically generate a seed phrase during the setup. This process usually has limited customization, ideal for users seeking simplicity and a one-time setup. Hardware wallets, like Ledger Nano X or Trezor Model T, also generate seed phrases but with an added layer of security.