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Jul 1, 2022

Seed Phrase

A seed phrase is a randomly generated list of 12 or 24 words that is used to recover access to a software or hardware wallet containing cryptocurrency funds.

What Is a Seed Phrase?

A seed phrase — also referred to as a backup phrase, recovery phrase, mnemonic phrase and mnemonic seed — consists of 12 or 24 words taken and placed in random order from a list of 2,048 words.

The reason why "mnemonic" is sometimes used to describe it is because 12–24 random words are easier to memorize than 12–24 random numbers, although most would find it difficult to remember all of these words and the order in which they’ve been arranged.

Don’t depend solely on your memory in order to recover your seed phrase. This is vitally important to remember, as the funds in your crypto wallet are lost forever if something happens to you — or to your ability to remember the seed phrase. The further consequence is that you wouldn’t be able to leave your assets to loved ones.

What Does a Seed Phrase Look Like?

An example of what a seed phrase may look like is this: "ice least shame open practice feed again road creek witch collapse despair." In other words, all of the words used are relatively short ones that are commonly known by English speakers.

The words included among the 2,048 possibilities have also been chosen because they’re more apt to be understood if written with poor handwriting or with letters missing. As long as you have access to the first four letters of each word, you can identify it.

How Does a Seed Phrase Work?

A seed phrase is your crypto wallet's master key. It provides users with access to their private keys, which verifies that the possessor of the seed phrase owns that blockchain address and, as a result, can do whatever they wish with its funds.

Having access to a seed phrase is like knowing a debit card and its PIN — except there’s no bank to call to recover anything. Keep in mind that there is no "forgot your password" option. If you lose access to your wallet, or to your own seed phrase, you have no other options, and your crypto funds are gone forever

For example, if you have a software wallet on your phone — with no backup option — and you happen to lose your phone, leaving you with no access to your seed phrase, you will never be able to access your crypto funds.

But if you do have access to your seed phrase, you then possess the ability to set up new crypto wallets and access your crypto funds in new places. In fact, a single seed phrase could be associated with a seemingly infinite number of addresses.

One recommendation: Once you’ve created a crypto wallet, delete it and attempt to recover access to its nonexistent or limited contents using that seed phrase to ensure that the process works seamlessly, before putting substantial assets into the wallet.

Why Is a Seed Phrase Important?

A seed phrase's most important purposes are protecting your crypto funds, allowing you to recover them elsewhere, and not allowing anyone else to access them.

You’ll want to ensure that your seed phrase isn’t easily discovered by others. This means you need to be mindful, ensuring that you don’t tell anyone whom you do not trust implicitly. Also note that storing your seed phrase electronically — including through a self-sent email, or otherwise on your device — can create risks too, especially if your account or device is hacked. This step is very important, because anybody who has access to your seed phrase can access your account — and, if they choose to, empty it.

Also keep in mind that no one from the company that oversees your wallet or is otherwise involved with crypto would ever ask you for your seed phrase. In addition, do not enter it into any website. Some people have been scammed through similar means, losing everything in their wallet.

Of course, the first thing that comes to many people's minds is to simply write down their seed phrase on a piece of paper — although this has its flaws as well. For one thing, do not write it down in a place that’s easily viewable by others. For another, you want to be wary of what item you write on — as that too can be damaged, either through water, fire or other means.

This is why some crypto owners write their seed phrase on stone paper, which is water- and tear-resistant; or engrave their seed phrase onto steel, which is usually waterproof, as well as fireproof up to 2,500 degrees. They then put it in a safety deposit box, safe or similar place.

Of course, these steps aren’t necessary if you’re comfortable losing your funds! But keep in mind that the value of what’s in your crypto wallet can increase to a significant amount — without you even realizing it.

Consider your seed phrase to be worth as much as what’s in your wallet — as well as its potential value.