Securing Bitcoin requires a minimum understanding of the underlying technology and its associated risks. A critical component of this security is the seed phrase.
This series of words serves as a backup and recovery mechanism for your Bitcoin wallet. And its security is paramount, as it grants access to your coins.
In this guide, you’ll learn what a seed phrase is, how it works, and why it’s essential to securing your funds. You’ll also discover how to mitigate the potential risks associated with seed phrases.
By the end of this guide, you’ll be equipped to take control of your sovereignty.
What Is a Seed Phrase?
A seed phrase is a unique sequence of words whose purpose is to help you recover Bitcoin funds. It is also known as a mnemonic phrase, backup phrase, or recovery phrase.
Think of it like a master password for your wallet. But instead of a string of random characters, it’s a human-readable collection of 12–24 words, combined in a specific order. And you can’t change it.
Example of BIP39 mnemonic:
sound mule riot custom anger conduct stone wheat sphere urge opera chef dose pepper dice trim sponsor season grape chapter airport file middle identifyHow Seed Phrases Work
When you create a new wallet, a random number is generated, known as the entropy. This entropy is used in two important ways:
- To derive multiple private keys, each with its own corresponding Bitcoin address.
- To create a seed phrase, typically encoded with a standardized system, such as BIP39.
Later, if you need to recover your Bitcoin, enter your seed phrase into a wallet. The wallet’s software will then use the encoded entropy to restore your private keys and access to your funds.
Types of Seed Phrases
BIP39 is the widely-used standard for generating seed phrases that are easy to read, write, and remember. Its 2,048 word-list provides a convenient way to back up and recover wallets.
BIP39’s widespread adoption is due to its interoperability, distinct words, and global usability.
Its seed phrases work across different wallets and devices, ensuring easy recovery. The carefully chosen words minimize errors and are also easily understandable by people from diverse languages and cultures.
The same BIP39 standard also enables backup and recovery of BIP44 wallets, which use a hierarchical derivation scheme to manage multiple accounts from a single seed phrase.
Other recovery phrase formats exist, although these have limited adoption. For example, Electrum uses their own Seed Version System, and Trezor uses SLIP39, based on Shamir’s Secret Sharing (SSS).
How Long Is a Seed Phrase?
A seed phrase is typically between 12 and 24 words long. The most common lengths are:
- 12 words
- 18 words
- 24 words
These lengths offer a balance between usability and security. In general, longer sentences are more secure, but may be more difficult to remember and type accurately.
Are Seed Phrases Secure?
A seed phrase is only as secure as the method used to generate and store it.
First, it must be generated using a high-quality random number generator to ensure that the entropy is truly random and unpredictable. This makes it extremely difficult for an attacker to guess or predict the backup phrase.
The length of the seed phrase also plays a critical role in its security. At 12 words, it would take the world’s most powerful supercomputer an enormous amount of time to crack. At 24 words, it is virtually unbreakable.
To add an extra layer of security, BIP39 wallets allow you to combine a passphrase with your seed phrase, making it even more difficult for an attacker to access your coins.
Finally, protecting your seed phrase from physical threats and accidental loss is crucial. It should be safeguarded against fire, flood, theft, and other forms of damage to ensure the security of your Bitcoin.
How to Generate a Seed Phrase
Generating a seed phrase involves creating entropy. You can either generate the entropy and then derive the sentence, or generate it directly.
If you want to generate a random sequence manually, you can roll a die or flip a coin. Then, convert the sequence into seed words.
If you prefer to skip the entropy, you can use a cryptographic wheel, to define each letter and word, or draw random tiles with words.
Alternatively, you can use a wallet or software program to generate a seed phrase for you, using a combination of algorithms and random number generators. This method is often faster and more secure than manual generation.
No matter your chosen method, it’s essential to import your mnemonic phrase into a hardware wallet next, which will verify the last word as a checksum, to confirm it’s correct.
Finally, test it by sending and receiving a small amount of Bitcoin to ensure it’s as expected.
How to Store a Seed Phrase
Your recovery phrase is the key to controlling your Bitcoin. If it falls into the wrong hands, your funds can be stolen. Here are some best practices to follow:
Back it Up
Many people new to self-custody often overlook one of the most important steps: backing up their seed phrase. Without a backup, you risk losing access to your Bitcoin forever if your wallet is lost or damaged.
Make a copy, by writing it down on a piece of paper, or a more lasting medium.
Avoid Digital Storage
While digital storage is very convenient, it can be easily compromised by malware, hacking, or unauthorized access.
Don’t use note apps, password managers, take screenshots, or save your seed phrase in a file, such as a Word document or PDF.
Choose the Right Backup Medium
Some media are prone to degradation or damage, like paper. And they probably won’t last long enough to protect your generational wealth.
Instead, consider using metal seed phrase storage devices specifically designed for this purpose.
Use a Tamper-Evident Method
Without a tamper-evident seal, you may not realize that your seed phrase has been compromised, until it’s too late.
Consider using a tamper-evident backup device, or sealing your backup in a tamper-evident bag or envelope. This ensures that any attempts to access the contents will be clearly visible.
Store it in a Secure Location
Storing your seed phrase in locations that can be easily accessed by others puts it at risk.
Consider storing it in a secure, separate location that is difficult to access, such as a safe or a secure container in a private area of your home, or even a separate geographic location.
Don’t Share it
Your seed phrase is for your eyes only. No one needs access, not even the company that created your wallet. If someone asks you for your seed words, they’re likely up to no good.
Keep your mnemonic phrase confidential. Do not share it with anyone, not even family members and friends. Solutions exist for inheritance that do not require putting your Bitcoin at risk.
Consider Additional Security Measures
If you store your seed phrase in a single location, or rely on a single method of protection, you’re creating a potential single point of failure, with the risk of losing your Bitcoin.
To avoid this, consider using security measures, such as:
- Using a passphrase
- Splitting your seed phrase into multiple parts, storing each part in a different location
- Creating multiple backup copies and storing them in different locations
- Using a multi-sig wallet, which requires multiple signatures to send Bitcoin
However, note that these measures also come with their own trade-offs. Carefully weigh the benefits and risks of each measure, and consider your own situation before implementing them.
Conclusion
A seed phrase is a crucial aspect of Bitcoin ownership. It serves as the human-readable backup and recovery mechanism for your wallet.
Derived from the entropy when generating a new wallet, it consists of 12–24 words in a specific order, encoded using a standardized system (like BIP39) to ensure interoperability and ease of use.
Even the shortest 12-word seed phrases are virtually unbreakable, providing a robust layer of security for your Bitcoin.
Securing your seed phrase is an ongoing process that requires vigilance and attention to detail. But with the right knowledge and precautions, you can take control of your financial sovereignty and actually own your Bitcoin.
Ready to take control of your financial freedom? Discover Seed Keys and take the first step towards reliable self-custody.