What is the Seed Phrase? Why is it so important?
The blockchain wallets that are used to store cryptocurrencies operate very differently than typical bank accounts, which can make the process of storing cryptocurrency a little more difficult to understand initially. You will be given what is known as a seed phrase when you first set up your blockchain wallet. These words, which are produced at random, are of the utmost significance, and anybody who owns cryptocurrencies ought to be familiar with the operation of seed phrases.
What is meant by the term “Seed phrase”
A phrase composed of a number of random words is known as a crypto seed phrase. It allows you to recover access to your crypto wallet. In fact, it is generally also termed the ‘recovery phrase.’
As previously stated, it is a collection of words—typically 12, but there are also 24-word recovery phrases—that are simply strung together at random and do not constitute a coherent sentence.
The seed phrase is sometimes mistaken with the private key, another crucial component of crypto wallets, especially by people who are new to the field. The distinction between recovery phrases and private keys, however, must be made. Consider the recovery phrase to be a sort of master password in a private key vs. seed phrase comparison, whereas a private key is what enables you to sign transactions in order to verify that a particular transaction originates from a particular wallet. In essence, the private key is what enables you to demonstrate possession of a wallet without revealing the owner’s name.
The purpose of the seed phrase is quite different. It will be sufficient to get access to the wallet provider and use the seed phrase to restore your accounts and crypto assets in the event that you use a crypto wallet on a device and it suddenly dies, is lost, or you simply need to use a new device for whatever reason.
Working of Seed phrase
During the process of setting up a blockchain wallet, each wallet will produce a seed phrase consisting of 12 to 24 words. It will advise the user to record all of the words in the correct sequence. A word list is used, and words are selected at random from that list. The BIP39 standard, which provides a list of 2,048 words, is utilized by a variety of wallets.
You must choose the option that allows you to restore using a recovery phrase before you may use a seed phrase with a wallet. You will be prompted by the wallet to input your seed phrase in the correct sequence. You will have access to your cryptocurrency in your wallet as soon as you have successfully input the seed phrase.
Other blockchain wallets may be able to make use of seed phrases, however this is dependent on other wallets adhering to the same standard. As an illustration, the BIP39 standard is utilized by both Meta Mask and Trust Wallet. Therefore, you may use your seed phrase from Meta Mask with Trust Wallet to import your cryptocurrency into that wallet, or vice versa.
Check also: How To Stay Private and Safe in Crypto Today?
How to keep seed phrase secure
It is advised to constantly make sure a crypto seed phrase is secure because it might cause harm in the wrong hands. The following advice will help you make sure your seed phrase is safe.
- Never reveal a recovery phrase to anybody else: It’s crucial to never share a seed with anyone else. Why? Because if a third party learns the recovery phrase, they will have access to and hence control over all the cryptocurrency funds stored in the wallet.
- It should be written down and kept in a safe place. Although it’s the oldest method of storing a recovery phrase, it’s still a very good choice. Either handwriting it down or printing it out are options. Your copy of the seed phrase should be kept in a fireproof and watertight safe.
- Password managers are encrypted digital vaults that may be used to store sensitive data including usernames, passwords, and recovery phrases. Instead of having to remember dozens or even hundreds of distinct passwords, a user simply has to remember one (the password for the password manager account). One password and LastPass are two instances of password managers. One benefit of storing a recovery phrase in a password manager is increased security. Users may build an even stronger and more secure backup by adding a secondary password, commonly known as a passphrase.
What happens if your seed phrase is lost?
The blockchain wallet is the other method, along with your seed phrase, that may be used to access your bitcoin holdings. Even if you forget your seed phrase, you will still be able to recover your cryptocurrency using your blockchain wallet.
In light of the above circumstances, you should make an urgent transfer of all of your funds out of that blockchain wallet. You may send them to a cryptocurrency exchange where you already have an account, or you can send them to a different wallet that you use. After you have completed those steps and verified that the transactions were successful, you will be able to revert back to the first wallet and produce a new seed phrase.
If you have misplaced the seed phrase for your cryptocurrency wallet, it is imperative that you immediately remove all of your cryptocurrency from the wallet. There are several reasons for this. It is possible for someone to steal your cryptocurrency if they discover your seed phrase and you continue to use the same wallet. There is no way to recover your cryptocurrency if you lose both the seed phrase that generated it and the wallet that contained it. You are going to need either one of these two things.