What Is A Seed Phrase, Its Importance And How Does It Secure Your Blockchain?

In the traditional financial system there’s a central authority that is involved behind the processing of every transaction. In case of a fault, we can connect with the authority to sort things out. But, for digital currency, there’s no single authority or entity involved in the backbone. There are technologies with added security mechanisms which are responsible for the security of your digital currency wallet. Every digital currency wallet is secured with a password, used to access and make transactions using the wallet. But, what if you forget the password? That’s when you use your ‘seed phrase’.

In the following lines on seed phrases, you will get to know what seed phrase its and how it helps to protect your funds.

What is a seed phrase?

As the name suggests, a seed phrase is a random long phrase which acts as a backup key to recover your access to the digital currency wallet.

If a user by chance loses their access to their digital currency wallet or forgets the authentication password, the seed phrase is the last thing that can help them to recover their wallet. The seed phrase is also known as recovery phrase because it is used to recover your digital currency wallet.

The seed phrase was first introduced with the introduction of BIP39 so that users can easily recover their account access.

A seed phrase consists of about 12 to 24 random words. Whenever an user creates an account in a digital currency wallet, it automatically generates the seed phrase for you.

How does a seed phrase work?

If you are a digital currency-enthusiast, you might wonder how this seemingly easy technology helps a person to help long into their digital currency wallet so conveniently. Here’s the complete overview of how a seed phrase works - right from its creation phrase to its application process.

Creation phase of a seed phrase:

As mentioned, the seed phrase is automatically generated when a user signs up for a digital currency wallet.

However, the wallet doesn’t directly create the seed phrase. Instead, the wallet creates a combination of characters (consisting of letters and numbers). The private key is unique to every single account using the wallet service. When the private key is generated, a computer algorithm creates a unique seed phrase based on the character of the private key.

Recovery by using a seed phrase:

Seed phrases are used to recover digital currency wallets. When the user forgets the password or loses the access to their wallet they use the seed phrase to get back the lost access.

When the user enters the seed phrase, a reverse computer algorithm converts the seed phrase back to the private key. The original private key is only generated when the user enters the correct seed phrase. The wallet then matches the private key with the original private key associated with the account. If the generated private key matches with the original private key, the user gets back their account access.

Importance of a Seed Phrase for Blockchain Wallets

As something which has the power to recover the access to an account, the seed phrase is very important for every blockchain wallet.

Recovery of digital currency account:

As the digital currency wallets do not have any physical existence, the users are prone to losing access to it by various means.

They may forget their password, aur shift to a new device, lose their current device, try to access their wallet from a different device - in all the cases, the seed phrase as a comprehensive solution to all problems.

Cryptography protection:

Cryptography methods are used to create private keys from which seed phrases are derived. So indirectly, cryptography methods are used to generate the seed phrases. Typically bit or 256 bit encryption (the encryption size is dependent on the number of words used in the seed phrase) is used for creating the cryptography hashes.

If any person with malicious intents price to assume every combination of words that are used to create the seed phrases, it would take them hundreds of years to guess the correct seed phrase. This is what makes seed phrases immune to brute force attacks.

Does not involve third party:

As blockchain is based on a decentralised platform, everything about the seed phrase is between the user and the cryptography wallet and does not record the involvement of any third party service provider.

Seed Phrase vs Private Key

Private key and seed phrase are two concepts that are closely related to the security of your crypto wallet; as a matter of fact - they are even interconnected.

A private key is a combination of random characters generated by a blockchain wallet that can be used to access your wallet and verify the ownership of your account/wallet.

In contrast, a private key is a seed phrase, a 12 to 24 word-phrase consisting of random words that are used to recover your access to a crypto wallet.

How to recover a blockchain wallet with a seed phrase?

If you have lost the access to your blockchain or any other digital currency wallet, you can use the seat phrase recovery method to gain back the access. Contact your wallet provider to enquire whether they support the seat phrase recovery method and if they do, make sure it is enabled for your account.

Please note that the recovery process can vary by wallet provider, so the process mentioned here might not be exactly the same for your wallet, nonetheless, it was still helpful documentation to guide you successfully recover your digital wallet account.

Open the login page of your blockchain wallet.
Look for the "forgot password" or "wallet recovery" option.
If you find any text box that promotes you to enter your seat phrase, enter your seed phrase very carefully. Don't forget to double check the number of words and the spelling of each word.
Click on the verify or proceed button to begin the verification process. Now, behind the hood, your crypto wallet will generate a private key from the seed phrase that you have entered. On successful verification, you will be promoted to set up a new password for your account.

Upon the completion of this step you may need to login to your blockchain wallet once again with the newly created credentials. Now you are all set to use your wallet once again.

Please note that some wallet providers provide only a single chance to recover your wallet. If you make a mistake while entering the seed phrase, give me loss the access to your account permanently.

Best practices for storing seed phrases

Seat phrase, being the ultimate way of recovering your digital wallet access, you need to secure it so that you can find it back whenever needed.

The best way to secure your seed phrase is to write it physically on paper and store it in a secure place. For better security you can write it down multiple times and store it in multiple secured places. It is always advised to store the physically written seed phrase in a place which is not easily accessible to other people.

You can go one step ahead to store your seed phrase into multiple portions, so that even if somebody has one of the options, they will need the remaining parts to bring any harm.

It is strongly advised not to store your seat phrase in digital format, be it on your hard drive or on the cloud.
Just like your credit card number or debit card pin, DO NOT SHARE YOUR SEED PHRASE WITH ANYONE.
Always take measures to authenticate the digital wallet that you are going to put your seed phrase in.

If it's an app, make sure that you download it from the official store and official publisher.

If it is a website, carefully check the URL of the website to avoid entering your secure data into a fishing site.

Conclusão

This was all about the beginners guide about seed phrases. To sum everything in one line: an user can use a fixed word combination to gain back access to their blockchain wallet which is known as a seed phrase.

If you’re interested in digital wallets and digital payment systems, we invite you to use “Ramp: - a platform to buy and sell digital assets on different blockchain. “Collections” helps you to collect global payments. “Payout” helps you to make hassle-free global payments.