What Is A Seed Phrase And How Does It Work

Cryptocurrencies are highly exposed to hacking, so it is important to ensure the protection and general security of your assets. There are seed phrases that serve as a key to recovering your funds if they are stolen or lost. In this article, we will explain more about the way the seed phrases work and how to manage them properly.

The Role Of Seed Phrases In Securing Cryptocurrency Wallets

First of all, let's learn what a seed phrase in crypto is. So, a seed phrase, also known as a recovery phrase, is a set of words that are randomly generated by a cryptocurrency wallet while setting it up. This phrase is used as an emergency backup in case you need to regain access to your digital assets.

Seed phrases provide crypto security and have several more uses. Firstly, they guarantee a refund if the wallet’s been hacked or lost. In such cases, it is possible to claim crypto assets with your seed phrase, which means full control over your funds. Secondly, this option will help you easily log into your wallet if you want to do it from a new device. Thirdly, you can also create a new wallet using it. To sum up, seed phrases ensure the safety of your assets in any situation.

How Seed Phrases Work?

So, how does the seed phrase protect your assets? In comparison with private keys, that are responsible for signing transactions and managing your funds, seed phrases are the specific tool for regaining access to your funds. If you lost your device or it was stolen or your private key was compromised, you can use the seed phrase to recover your wallet on a new device. To do it, you have to enter the correct word sequence of your recovery phrase, after which you will be able to generate the same private key and regain control of your funds.

Types Of Seed Phrases And Standards

Now let's take a closer look at what seed phrases consist of and what types of them are there.

Seed phrases exist in variants with different word numbers, but there are two most common ones consisting of 12 or 24 words. They are chosen from a list of 2048 words, so you are guaranteed to get a distinctive set of words. The seed phrases consist of random word order which can look like “cat, chair, flower, river, foot, carpet, image, three, amazing, make, shoe, say”.

Seed phrases of 12 words provide a quite high security level for several years, while those of 24 words protect wallets for 30-40 years. Users choose 24-word phrases more often as the most secure option.

In addition to different word amounts, seed phrases are also categorized by BIP (Bitcoin Improvement Proposal) standards, as they were originally aimed at improving the Bitcoin wallets’ security. Let's take a closer look at these options:

• The BIP-39 standard. The algorithm is responsible for creating mnemonic phrases from the wallet's private keys. It does it by rewriting it into an easy-to-read phrase. The standard can consist of 12, 15, 18, 21, or 24 words.

• The BIP-32 standard. This is a method that creates hierarchical deterministic wallets (HDs) that allow many private keys and addresses to be generated from a single seed phrase. They are not always readable, which improves reliability.

• The BIP-44 standard. The standard provides interoperability between multiple wallets that allows users to switch from one provider to another. What is more, BIP-44 supports different cryptocurrencies and accounts within the same wallet.

We recommend using crypto wallets that support the above standards, as they are not only safe but also universal due to their compatibility.

Best Practices For Creating And Storing A Seed Phrase

There are several methods you can use to create a seed phrase. Here they are:

1. Using a cryptocurrency wallet. Most digital wallets (e.g., Cryptomus, Electrum, or Metamask) generate seed phrases automatically after you request this feature. However, some platforms don't offer too many options for phrases, so this variant would be perfect if you agree to any word combination and are willing to never change it.

2. Using the app. It is also possible to create a recovery phrase with the help of the apps in the wallets themselves. It is also done automatically in most cases. Then you can also find your seed phrase in the application settings, usually in the same place where your private key is stored. And read about how to find the seed phrase in different wallet providers in the FAQ section of our article.

3. Offline. You can generate a seed phrase by yourself using a smartphone or computer disconnected from the Internet. Download a seed phrase generator, such as the BIP-39 Tool, to another device and transfer it to your “offline” device. You can now proceed to create using the downloaded program.

After creating a seed phrase, you need to take care of its safe storage. Try not to store it digitally, and even under a password, because connecting to the Internet carries a risk of hacking and access to your data by intruders. Therefore, the best way is to write down the seed phrase on paper and keep it in a safe place that only you know about: for example, in your personal safe.

Take care to make copies in case the paper with the phrase is destroyed, which you should also hide in reliable places. It is important due to the fact that the loss of a seed phrase and its copies leads to the loss of access to your wallet and assets forever. And if you prefer to store your seed phrase digitally, then you can try to recover it in case of accidental deletion of the file on which it was stored. To do it, hire a data recovery specialist: he will help retrieve the deleted file, including your seed phrase.

You should also remember that you cannot change your seed phrase; that is why it is so essential to keep it safe and sound. If you want to get a new one, you can do it only by creating a new wallet. You also cannot use your seed phrase on any wallets, as it only works with the same wallet software that created it.

How To Recover Your Crypto Wallet Using A Seed Phrase?

If you have lost access to your crypto wallet for some reason, that is the case when you need to use a seed phrase. This process varies depending on the wallet provider you use, but generally it contains the same steps:

• Step 1: Choose wallet software. Open an application that is compatible with your wallet (such as Electrum or Metamask).

• Step 2: Select the restore function. While setting up the app, click on “Restore” or “Import” your wallet.

• Step 3: Enter the seed phrase. Now you can enter your recovery phrase; do it carefully and make sure you write the words in the correct order.

• Step 4: Set a new password. Come up with the new password or PIN for your recovered wallet for security, and confirm it.

• Step 5: Log in to your wallet. Once you have completed all the necessary steps, log in to your wallet to check whether everything was successful.

Pros And Cons Of Utilizing A Seed Phrase

A seed phrase is a good tool to preserve your assets and guarantee access to them. Nevertheless, there are some problems that you may face when using it. Let's take a closer look at the pros and cons of using seed phrases.

Benefits	Security. A seed phrase allows you to access your wallet in case of loss, so your assets will always be safe.	Universal access. You can use the recovery phrase on any device or a piece of software if you do not have access to the one you usually use.	The possibility of backup. A seed phrase allows you to restore your wallet and all the data on it using only this recovery option.
Drawbacks	Irreversible if lost. If you lose the seed phrase record and all copies of it, you will lose access to your wallet and funds forever.	Phishing attacks. Crypto scammers operate in the cryptosphere actively, and they can fraudulently force you to reveal the seed phrase.	One point of failure. If your seed phrase falls into the scammers’ hands, they will have full control of your wallet and can easily steal your funds.

As you can see, seed phrases are a great tool for additional protection of your cryptocurrency wallet, but there can be problems, mostly related to scam risks. To stay safe in the crypto space, read our guide where we have covered the main types of crypto scams and told how to avoid them efficiently.

Despite some challenges, be sure to create seed phrases as an additional security measure when creating a wallet. Follow our recommendations on smart storage and ensure the safety of your cryptocurrency with Cryptomus!

As we have promised, you can study the information on how to find the seed phrase in Metamask and Trust Wallet below.

FAQ

How To Find A Seed Phrase In Metamask?

If you use the Metamask wallet, you can find your seed phrase in the app’s settings. So, log in to your account, enter the “Settings”, select the “Security & Privacy” section and click on “Seed Phrase”. You may need to enter your Metamask account password at this step. After that, you will be able to see your seed phrase.

How To Find A Seed Phrase In Trust Wallet?

If your cryptocurrency wallet is powered by Trust Wallet, you can easily find your seed phrase. To do it, open the Trust Wallet app, go to “Settings”, select “Wallets” and click on the desired one. Then choose the “Show Recovery Phrase” function, enter your wallet password and you will see your seed phrase.