What Is a Seed Phrase?

3 min read
DeFi Guides

The seed phrase, also known as backup, recovery, or mnemonic phrase, stores the data needed to access your non-custodial crypto wallet. It works as a master key that grants control over your digital assets. The seed phrase consists of 12 to 24 simple words, randomly sequenced from a list of 2048 words. Here is an example of what a 12-word seed phrase can look like:

carpet, cat, flower, chair, foot, river, make, image, amazing, three, say, shoe.

The seed phrase is generated the first time a user sets up a wallet. It ensures access to the crypto assets associated with the wallet that generated the phrase, even if the wallet interface through which you normally access it is deleted or lost.

How to Store Your Seed Phrase Safely?

The most secure way to store a seed phrase is offline. Among the most widely-spread practices is the old-school method of writing it down on a piece of paper and storing it in a physically secure location. To eliminate the risk of losing access to your seed phrase, you can also make copies and store them in multiple places. Crypto hardware wallet and security infrastructure providers offer steel capsules or cases that allow you to engrave or recreate your seed phrase and store it safely. Unlike paper, these tools are an almost indestructible storage medium since they can resist fire, water, and other hazards. However, they should also be stored in safe locations.

How Not to Store Your Seed Phrase?

A seed phrase can only be compromised due to a human error (e.g., falling victim to a phishing attack or storing it improperly). Here are a few tips on how to avoid that:

  • Don’t store the seed phrase electronically or pass it online.

Sending it to yourself via email or chat or storing it on a hard drive or a cloud makes it highly vulnerable to compromising in case your account or device gets hacked.

  • Don’t try to memorize it.

Rememberinga 12 to 24-word seed phrase is rarely a sound strategy since you should not only memorize all the words but also arrange them in the correct order.

  • Don’t take pictures of your recovery phase.

In case the files end up in the wrong hands or your device gets hacked, you will likely lose access to your funds.

  • Avoid storing your seed phrase in a password manager.

While password managers are reasonably secure, there have been instances when their security has been compromised.

What Happens If You Lose Your Seed Phrase?

In a nutshell, if you lose your recovery phrase, you lose access to your digital assets. However, depending on the situation, there might be different ways to act:

  • Losing your seed phrase but having access to your wallet.

If you lose your seed phrase (e.g., losing or damaging the medium it is stored on) but are still logged into your wallet, you will be able to access your funds. In such cases, you should just find the seed phrase in the wallet interface and store it securely.

  • Losing your seed phrase and access to your wallet.

In that case, you might lose access to your crypto assets. However, your funds remain intact on the blockchain, and if you’ve used Identity to manage your on-chain activity, a new wallet can be connected to it, and you will again be able to access and manage your funds.

  • Your seed phrase is stolen.

This is the worst possible scenario since access to your wallet will end up in the hands of whoever possesses the seed phrase, and you won’t be able to regain your funds. Bear in mind that, once lost, seed phrases can’t be recovered and only you should have access to it. Your seed – your crypto.

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