What Is a Bitcoin Seed Phrase? Seeds vs. Private Keys

By Brian Nibley · November 02, 2021 · 6 minute read

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What Is a Bitcoin Seed Phrase? Seeds vs. Private Keys

A Bitcoin seed phrase is a mnemonic representation of a random number that, through advanced cryptography methods, is one step in creating a private key for a user’s crypto wallet (along with a password and HD path).

The phrase takes the form of a sequence of 12 or 24 words that are chosen randomly from a list of 2,048 words. That private key then enables the crypto wallet to send coins.

Wallet seeds are also used as backups for software wallets, mobile wallets, and hardware wallets. Using this string of words, users can restore their private keys if something happens to their wallet or if they forget their PIN or password.

How Bitcoin Seeds Work

Bitcoin seeds provide a way for users to restore their balances in the event that their cryptocurrency wallet becomes lost, stolen, or damaged. The wallet holder can open a new wallet and use their old seed phrase to get their coins back.

Most often, users have to back up a copy of their seed phrase when first setting up their wallets. In the event they fail to do this, some wallets provide a way to find or export the seed phrase.

It’s important to never share the seed phrase with anyone. Anyone who knows the wallet seed can access all of the coins in that wallet and steal them forever. There is no legitimate reason that anyone could need your seed phrase, so if someone asks for it, you can be sure it’s a scam.

Example of a Bitcoin Seed Phrase

Here is an example of what a Bitcoin seed looks like:

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How to Use a Bitcoin Seed Phrase

Using the seed phrase is pretty easy. Imagine someone had a hardware wallet and lost it. All they have to do is get a new one and import their seed phrase. The wallet software will then restore their previous balances.

The process would be the same if someone:

•   had a mobile wallet and lost their phone

•   had a web wallet and deleted their browser

•   had a software wallet and had something happen to their computer

Setting up a new wallet of the same type and importing the seed phrase would restore the old wallet.

Recommended: Cold Wallet vs. Hot Wallet: Choose the Right Crypto Storage

What is BIP39?

BIP39 — which stands for Bitcoin Improvement Proposal: 39 — is the technical name for a Bitcoin seed, also known as a master seed, wallet backup, recovery phrase, and mnemonic seed.

BIP39 is the use of a mnemonic phrase — a group of words that are designed to be easy to remember — that serve as a backup for the private keys to a particular wallet. The words come from a specific list of 2,048 words called the BIP39 wordlist.

BIP39 has become the standard for many of the most popular wallets. Because many wallets use this same standard, the phrase to your wallet can be entered into any other wallet that supports the same coins and BIP39 to access your coins.

How is a Bitcoin Seed Different from a Private Key?

Each Bitcoin wallet consists of two main pieces: a private key and a public key. The public key is used for receiving transactions and the private key is used for sending transactions.

Recommended: How Does a Bitcoin Transaction Work?

A Bitcoin seed can be thought of as a backup for the private key to a wallet. The seed phrase enables a wallet to derive your private key.

A private key to a cryptocurrency wallet is the equivalent of an ATM PIN to a bank account. Bank accounts have a unique PIN, which proves to the ATM that a user owns the account. Using the PIN, anyone can spend funds from the account.

In a similar manner, private keys prove to the Bitcoin network that an individual owns a certain amount of Bitcoin and can spend them.

A private key is a 256-bit number, which is a random number between the values of 0 and 115,792,089,237,316,195,423,570,985,008,687,907,853,269,984,665,640,564,039,457,584,007,913,129,639,936.

Of course, no one wants to enter a number like this each time they spend their coins. So, developers created a way to derive private keys that would be easily used: the seed phrase.

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Is it Possible for Someone to Guess Your Seed Phrase?

In theory, yes, it’s possible that someone could correctly guess every word in a 12 or 24-word Bitcoin seed phrase. But it’s practically impossible. To date, there has never been a known case of someone guessing the correct Bitcoin seed phrase for a wallet that didn’t belong to them.

Where Should You Store Your Seed Phrase?

Users should store their seed phrase on a piece of paper in a secure location where they will remember it. If someone got their hands on a user’s seed phrase, they’d be able to steal all the coins held in the wallet the phrase is connected to. If the seed phrase is lost, there would be no way to recover the wallet funds in the event that the wallet itself was damaged, lost, or stolen.

There are a number of ways to consider storing a seed phrase in addition to a piece of paper held at home. For example, users could:

•   create an encrypted code for the phrase, so that if someone finds it, they won’t know what it means

•   store the phrase in a safe deposit box

•   memorize the phrase so as to never forget it

One thing is for certain. Never store a seed phrase in digital format on any device. It’s too easily compromised. A piece of paper can’t be hacked.

The phrase should also be stored on something durable. If it’s a piece of paper, consider getting that paper laminated so it can last longer. There are also steel plates that can be used for storing seed phrases, like those provided by BlockPlate .

The Takeaway

A seed phrase provides an easy way for people to store and retrieve their private keys. Seed phrases and private keys aren’t the same thing, although both allow someone to spend the coins in a given wallet. Wallets can derive private keys from a Bitcoin seed phrase.

For those looking to store a large amount of coins in cold storage for the long-term, using a device like a hardware wallet could be a good option. And safely storing the backup seed phrase for such a wallet is of the utmost importance.

Seed phrases also exist for software and mobile wallets, although these could be seen as less important since savvy users won’t store too much coin in those types of wallets.

The BIP39 standard allows for the private keys of any wallet that uses it to be derived from a simple 12 or 24-word string of words randomly selected from a list of 2,048.

When trading crypto on a secure exchange like the one provided by SoFi Invest®, there’s no need to worry about seed phrases or private keys. Investors can trade dozens of cryptocurrencies including Bitcoin, Litecoin, Cardano, Dogecoin, Solana, Enjin Coin, and Ethereum.

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Photo credit: iStock/FotoDuets

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