What is Seed Phrase? Everything You Need to Know about Recovery Phase

Ķey takeaways

  • A seed phrase is a 24-word series of words that acts as the password to your crypto wallet
  • Your seed phrase is the only backup to your crypto assets and gives you access to them 
  • One must keep the seed phrase safely in order to get access to your crypto wallet


The major distinction that makes the crypto space accessible to users is its self-sovereignty. This allows you as a user to have access to your crypto without the requirement to prove your identity or rely on a bank. Major cryptocurrencies like Bitcoin or Ethereum use blockchain technology to store and secure the crypto you are investing in by using a P2P network of computers worldwide. The blockchain uses certain codes that generates passwords algorithmically that can only the holder can access. The seed phrase or recovery phrase is considered the last line of defense when it comes to providing security for crypto users.

A recovery phrase or seed phrase can help you lose access to the crypto wallet in an emergency. While many tend to confuse private keys with seed phrases, they are completely different and serve different purposes. 

Let’s dig deeper to learn more about the recovery phase and its importance in the crypto space.

Seed/recovery phrase: what is it exactly? 

A seed or recovery phrase is basically a cluster of random words that your crypto wallet generates algorithmically at the time of setting it up and act as a backup. Your seed phrase helps you to regain access to your funds as well as your cryptocurrency wallet in case of emergencies. For example, if you have lost your phone and have a mobile wallet, you can use the seed phrase to get complete access to your crypto. These seed phrases are intercompatible, which makes it easier to switch wallets as well, apart from recreating your wallet. It thus goes without saying how important it is to secure your funds in crypto.

How does a seed phrase work in crypto?

Although it is termed a “wallet,” your cryptos aren’t actually stored within it and instead exist as data on the blockchain. This implies that even if access to your wallet gets interrupted somehow, the funds are still recorded safely on the digital ledger of the blockchain. Upon creating a crypto wallet a seed phase is automatically generated that represents a long series of random numbers that your wallet uses to create private keys for making transactions. 

The seed phrase is a string of simple words like “stereo,” “fabric,” or “opera” instead of numeric passwords. The reason behind this is simply that humans are better at remembering a series of words than a string of numbers. However, instead of relying on your memory, it is always a better idea to secure your seed phrase, as losing it can lead you to lose access to your wallet. 

Every seed phrase is generated from a list of 2,048 simple English words known as the BIP39 standard that most of the leading crypto wallets use. Whether it is a hardware wallet or a software one, recovery phrases are generated each time a crypto wallet is created. Each seed phase is 12 or 24 words long and unique to the wallet it was created in. 

The “seed” in a seed phrase refers to the strings of random digits that can be used to generate your private master key, which can in turn be used to generate your private keys as well. While the recovery phrase might seem to be simply a set of words, it basically translates into a lengthy series of data that appears similar to a cryptocurrency address. 

What does it look like?

Instead of a numeric series, each recovery phrase is generated from the BIP-39 word list, a list of 2,048 English words that were adopted after the Bitcoin Improvement Proposal 39 in 2013. This proposal established a benchmark for a “deterministic wallet” that most crypto wallets follow. Here, one seed phrase will be charged to control all the private keys that are held in the wallet. 

While the words are randomized, it is important to remember that the recovery phrase is not in any old order. To get access to your wallet, you must put the words in the same order in which they were generated. Because the order itself is part of the phrase.

Private Key vs. Seed phrase

Private keys and seed phrases can often be confused, as both are sequenced and created by new crypto wallets. Since both are crucial to the safety of the wallet, they need protection to prevent access by intruders. Despite the similarities, they differ in their functionalities.

Private keys come from the string of numbers representing your recovery phrase. It enables users to send or spend cryptocurrencies. Seed phrases are the master key that gives you access to your wallet along with the private keys as well. 

You can imagine your private key as your ATM’s PIN combination. It is a password that helps in facilitating fund withdrawals or approving a purchase while using a debit card. On the other hand, a seed phrase is more likely the master key to your entire savings, and whoever possesses it can have the ability to have complete control over the account. 

How to safely store a seed phrase?

Since this is the “key” to your crypto wallet, it should be a secret at all costs. The 24-word seed phrase is the main backup of your assets in crypto that anyone can access if compromised. For this reason, most people use different strategies to securely store their seed phrases. Some of them are as follows.

  • You can secure it by splitting it between safe deposit boxes in different locations. However, this strategy might not be convenient for many. 
  • Engraving your recovery phrase on durable metals like stainless steel can help. Many people simply write it down and have multiple copies safely kept in different locations.
  • You can also use a hardware wallet that is legitimate and trustworthy. However, make sure not to keep them in any smartphone application or computer. 

Final words

There is no denying the importance of seed phrases to your crypto assets. That is why it becomes critical to store them in a highly secure place. You should always stay away from making a digital copy of your seed phrase. Instead, one should take foolproof steps to secure them before someone steals it. Remember, the recovery of your crypto wallet solely depends on these.


Is it possible to recover a wallet with a seed phrase?

You can securely restore your wallet on another device by simply entering a 12-word or 24-word phrase into a new wallet. 

What happens when you lose the seed phrase?

If you lose the seed phrase, it means you will lose access to your crypto wallet as well as your funds.