What is a seed phrase and why is it important?

Please accompany Unilaunch to learn “What is a seed phrase and why is it important? How does a seed phrase look?” through the article below.

What is a seed phrase?

A recovery phrase (also called a seed phrase) is a group of random words generated by the cryptocurrency wallet that allows users to access the crypto stored within.

One can consider it as a wallet comparable to a password manager for crypto, and the recovery phrase is similar to the master password. It grants access to all of the crypto linked with the wallet that created the phrase — even if it’s deleted or lost — as long as the recovery phrase is available.

A seed phrase aids to recover a cryptocurrency wallet when a user forgets their password. The seed phrase can be said to be a crypto wallet’s master key. For example, when a hardware wallet and lost or deleted wallet from the computer, it can easily create a new wallet and use the seed phrase, which will recover cryptocurrencies held in the wallet.

Related: Why DeFi, GameFi and SocialFi are horizontals in the Metaverse?

What is a seed phrase and why is it important?

How does a seed phrase look?

A seed phrase may be perplexing. What does it look like? How is it generated? A cryptocurrency wallet generates the seed phrase automatically, and the user cannot customize it.

The words generated are derived from a list of 2048 words. So, how many words is a seed phrase? A seed phrase is made up of a long string consisting of a group of random words.

The words on a seed phrase are simplified so that the user can remember them, unlike if the seed phrase consisted of long numbers or special characters.

The recovery phrase consists of 12 to 24 words like energy, road or open. To avoid errors, these randomly generated words do not include pairs like “man” and “men” in the same seed phrase. Bitcoin improvement proposal-(BIP)-39 in 2013 introduced these types of phrases and established a standard for deterministic wallets. Here is an imaginary 12-word seed phrase: Cry, planet, Loose, Typical, Humankind, Toddler, Anxiety, Difficult, Happy, Never, Alternative, Remorse.

A seed phrase controls all the private keys associated with a deterministic wallet. BIP-39 proposal makes major wallets cross-compatible, allowing the users to load the recovery phrase to a new BIP-39-compatible wallet to access the funds when they are lost or if you want to switch wallets.

Recovery phrase vs. private key

Despite being related to each other, the recovery phrase and private key are different. They both are used for securing cryptocurrency wallets.

A recovery phrase is a crypto wallet recovery password. The recovery phrase is used for the recovery of a cryptocurrency wallet in case the owner forgot their password. A private key, on the other hand, is used to point to a blockchain address hence securing transactions. A private key is used for transacting cryptocurrencies by proving ownership.

In short, a recovery phrase is a master key to all crypto accounts owned by the user. These words are what give access to all of the private keys stored in the original wallet. The goal is to have full control over the digital assets. Having this phrase allows users to access blockchain assets even if they lose or damage a physical hardware device. But, how does a seed recovery phrase work?

Simply put, users may access their crypto accounts from whatever wallet they choose — it’s like having a charger for every type of phone. Imagine the confusion if every wallet necessitated a different recovery phrase format.

Can a seed phrase be hacked?

In the crypto world, losing cryptocurrency is a nightmare for all cryptocurrency owners. Losing a seed phrase to an attacker means the crypto funds cannot be recovered.

Being in a digital world, crypto heists are tirelessly working to reap what they didn’t plant. As seen earlier, a seed phrase is a master key to accessing a cryptocurrency wallet, which means that in the wrong hands, damage is inevitable.

However, by having a large number of words in a seed phrase, it is hard to hack it. In order to access a seed phrase, phishing is the main method used. One way scammers try to get a seed phrase is by sending emails pretending to be customer support and request for a seed phrase or private key.

Once the seed phrase lands in their hands, they can access a crypto wallet and steal everything in it. It is always advisable to keep a seed phrase private and never share it with anyone else.

What happens if you lose a seed phrase?

Losing a seed phrase is really the worst-case scenario for a cryptocurrency owner. One cannot recover a wallet seed in case they lost or forgot it.

Giving your seed phrase to someone or entering it on a website has no practical benefit as it may lead to losing cryptocurrency assets held in the wallet. Additionally, avoid writing a recovery phrase on a refrigerator. It can help protect against theft.

The best way of ensuring the safety of a seed phrase is by noting it down and keeping it safe. In addition, its advisable to keep a copy of the seed phrase somewhere it cannot be destroyed by any element. But, can someone guess a seed phrase?

The seed phrase is generated randomly; not even the cryptocurrency user knows what word combination will be used to generate the seed phrase. Due to a seed phrase’s random characteristic, it is hard to guess a seed phrase. Something else that makes it challenging to know a seed phrase is that it consists of 12 to 24 words leaving no chances of getting all the words right.

How to keep your seed phrase safe

A crypto seed phrase in the wrong hands can do damage, so it is advisable to always ensure it is safe. The following are some tips for ensuring your seed phrase is secure.

  • Never share a seed with anyone else: It’s extremely important to never reveal a recovery phrase to anyone. Why? Because if someone else finds out a recovery phrase, they will be able to access — and therefore control — all the crypto funds held in the wallet.
  • Make a note of it on paper and keep it in a secure location: This is the most old-fashioned way of storing a recovery phrase, but it’s still a perfectly valid option. It can either be written down by hand or printed out. A fireproof and waterproof safe would be ideal to store your copy of the seed phrase.
  • Storing inside a Password Manager: A password manager is an encrypted digital vault that can store sensitive information like usernames, passwords, and recovery phrases. This way, a user only has to remember one password (the password to the password manager account) instead of dozens or hundreds of different ones. Some examples of password managers include Onepassword and Lastpass. Storing a recovery phrase in a password manager has several advantages, one of which is added security. Adding a secondary password — also known as a passphrase — users can create an even stronger and more secure backup.

Source: Cointelegraph.com

Follow: