Seeds of Security: Introduction to Recovery Seed Phrases
In the event that anything goes wrong when storing your coins, knowing your seed phrase will allow you to recover your assets. But what is a seed phrase and how can you find yours? Most importantly, how can you go about keeping your seed phrase and cryptocurrencies safe?
As part of our attempt to help both new users and experienced traders navigate the crypto landscape, we’re publishing a series of easy to understand guides in plain English. For more quick explanations, check out our article "Cryptocurrency: Terms to Know for Beginners".
What is a seed phrase?
A seed phrase is simply a randomly generated string of English words which, when entered in the right order, allows a user to recover their private key.
In our guide to public and private keys, we outlined the fact that a private key grants total control of a cryptocurrency wallet and all the digital assets it contains. If you misplace your private key or your hardware wallet becomes damaged, having a recovery seed phrase will allow you to regenerate your private key and get your crypto back. Otherwise, without a backup, your chances of recovering your lost coins are pretty slim.
Where things get tricky is that, depending on who you ask, the term “seed phrase” can go by many other names. You may have also heard it referred to as a “recovery seed”, “backup phrase”, “mnemonic phrase”, “backup seed”, “BIP39 recovery seed”, or some similar amalgamation of these terms. Some of these, like "backup phrase", emphasize why these words are important, while others, like "mnemonic phrase", emphasize that these are words rather than a string of nonsense characters. But at the end of the day, these terms are all just different ways to say the same thing.
Regardless of what you call it, your seed phrase/recovery seed/mnemonic phrase will usually look something like this:
stereo trend uphold they gym quote
yard torch quick dial bracket east
This example is a string of twelve words taken from the English BIP39 list. BIP39 is the cryptocurrency standard that most hardware devices and software use to generate a unique seed phrase for each wallet.
What makes your seed phrase secure is the fact that this list contains 2,048 possible words that can make up a phrase. These words need to be entered in precisely the right sequence for the wallet to give you back your private key. Due to the plethora of potential word combinations, a seed phrase made up of twelve words is said to have 128 bits of entropy. In other words, it could take a computer 2^128, or over three hundred forty undecillion, tries to correctly guess your seed phrase. Put simply, your seed phrase is safe from "brute force" attacks and boasts a similar level of security as a Bitcoin private key.
Behind the scenes, the process of using a seed phrase to recover a private key is extremely technical. If you're interested in learning the specifics, check out this guide. As a simple explanation, your wallet pairs each word in your phrase with specific parts of your private key. It can then use the seed phrase to determine your private key and give you access to your wallet. Luckily, from a user’s point of view, using your seed phrase is as simple as entering in the phrases in the correct order when prompted during the recovery process.
Where to find your seed phrase
The exact method for finding your seed phrase differs depending on the type of wallet that you use.
Hardware wallets
As we've mentioned in previous articles, hardware wallets are typically the safest way to store your crypto. For most hardware wallets, your seed phrase is given to you when you first set up your device and, for security reasons, isn't shown again. On a Trezor One, for instance, you are prompted to “create a backup in 3 minutes”. Going forward with this process will then give you the option to write down your seed phrase. It is vital that you create a durable physical copy of your seed phrase during this step, as you cannot find your wallet's seed phrase again.
Software wallets
Many software wallets allow you to recover your seed phrase by going into your settings. For instance, MetaMask lets you view your seed phrase by going into your “security & privacy” settings and pressing the button labeled “reveal seed phrase”. This can be helpful if your seed phrase is lost or destroyed. However, since your seed phrase is as powerful as your private key, this can make your funds significantly less secure.
Cryptocurrency exchanges
If you're using an online exchange, you most likely cannot access your seed phrase. When you leave your coins in a crypto exchange, you're essentially trusting the exchange to hold your bitcoin and other digital assets on your behalf. This is where the phrase “not your keys, not your coins” comes from—as most exchanges don't give you ownership of your private key or seed phrase. This is concerning, as many have a spotty record when it comes to protecting their users's funds. For this reason, experts advise moving your coins from an exchange into your own wallet. Again, we recommend reading our article about keys and key safety, as well as our article about wallets, so you're fully informed.
How to protect your seed phrase and make sure your keys stay safe
Seed phrases are incredibly robust and secure ways to ensure that you will be able to regain access to your bitcoin and other crypto in the event that you lose your private key. However, since seed phrases are as powerful as your private keys, it is crucial that you never store your seed phrase online, on your phone, or on your computer. Storing your seed phrase in these places would place your coins at risk of being stolen as a consequence of spyware or cyber attacks. You should also never store your seed phrase in a public place or somewhere that it could become stolen, lost, or damaged.
Some people bypass this problem entirely by memorizing their seeds, often using mnemonic devices, stories, or old-fashioned repetition. However, this method puts a lot of faith in often-faulty human memories and so is not a wise long-term seed storage solution. Instead, experts recommend that you only ever store your seed phrase physically in a secure location. Writing it down on a piece of paper or cardboard, for instance, is much safer than storing it in a text file on your computer. By writing it down, you do still run the risk of misplacing the piece of paper or it becoming damaged. To counter these risks, make sure you put your written seed somewhere safe from fire, theft, and water damage. It also needs to be kept somewhere that you can always find it yet other people cannot. A fireproof safe, for instance, is often a great option.
Some devices offer increased protection by using discreet and extremely difficult-to-damage designs that allow you to record and preserve your seed phrase offline for an extended period of time. Some examples include the Cryptosteel Cassette, Cryptosteel Capsule, and Cryptotag Zeus.
Ultimately, your seed phrase is deceptively simple: it's just a set of words that allows you to regain access to your bitcoin and other digital currencies in case the worst happens. It's up to you to take your seed phrase's safety into your own hands with appropriate safety measures. If you're interested in taking your safety and your finances into your own hands by buying, exchanging, or selling crypto, you're in the right place with Invity!
Cover photo: Seed by Rodger Evans, licensed under CC BY-ND 2.0.