What is a seed phrase?
The secret words used to generate and backup your private keys
A seed phrase is a sequence of 12 to 24 simple words that serves to generate and backup your Bitcoin wallet’s private keys.
Private keys are required to prove ownership when authorizing a bitcoin transaction.
You can think of private keys as like the master keys that unlock your bitcoin whenever you need to spend. As a result, creating, managing, and securing private keys is of utmost importance.
So where do private keys come from? … From a seed phrase.
Most modern Bitcoin wallets (aka Hierarchical Deterministic or “HD” wallets) create private keys from a standard process involving a seed phrase. The process begins by generating randomness (aka “entropy”) to create a 128-bit to 256-bit number (128 to 256 ones and zeros). For human-readability and ease-of-use, that random number is converted into a corresponding sequence of 12 or 24 words called a “seed phrase,” which is used to create private keys. You can think of a seed phrase as a human-friendly way to represent a very big random number.
The process of going from seed phrase to private keys is deterministic, which means the same set of private keys can always be reproduced from a given seed phrase. Seed phrases, therefore, serve two main roles:
If you use a custodial Bitcoin wallet, like Strike, then the custodian will be in charge of managing the seed phrase and private keys on your behalf. Taking self-custody of your bitcoin is the process whereby you send your bitcoin to an address where you control the private keys yourself, including the seed phrase from which they’re created.
Even though bitcoin is a digital asset that exists as records on a distributed ledger called a blockchain, you can hold your seed phrase in your possession or even memorize it in your head. Since the only way to spend bitcoin is with the correct private key, having exclusive control of your seed phrase (and by extension your private keys) is how you can own bitcoin without relying on any trusted 3rd party.
It goes without saying that the most important thing to know about seed phrases is that they must be kept secret and secure. If someone takes your seed phrase, they can recreate your private keys and take your bitcoin.
Seed phrase words come from a standardized word list defined by Bitcoin Improvement Proposal #39 (aka BIP39). This proposal was introduced in 2013 to simplify and improve the process of backing up and recovering Bitcoin wallets.
The word list contains 2,048 simple words, however, only the first 4 letters of each word are actually relevant since no two words in the list share the same first 4 letters. The list is ordered alphabetically, so that each word corresponds to a specific number in the list, with “Abandon” being the first word and “Zoo” being the last.
To make a 24-word seed phrase, your wallet will follow these steps:
00000000000
matches to the 1st word (“Abandon”), 00000000001
matches to the second word (“Ability”), and so on until 11111111111
matches to the 2,047th word (“Zoo”).Depending on the wallet or configuration, seed phrases can also be 12 or 18-words long, providing differing balances between simplicity and security. 12 and 18-word phrases follow the same procedure, except that they have 128-bit or 192-bit randomness with 4-bit or 6-bit checksums, respectively.
When setting up a self-custodial wallet, you’ll be prompted to write down your seed phrase. It’s crucial to record the words accurately and in the correct order. To protect from water or fire damage, consider storing your seed phrase on a steel plate. Also, keep in mind that your seed phrase is the backup for your bitcoin, so taking utmost care is warranted.
Once your wallet has gone from randomness to seed phrase, it can then be used to produce subsequent private keys, public keys, and Bitcoin addresses. Here’s the basics of how it works:
The process of going from a seed phrase to a set of Bitcoin addresses is deterministic, meaning the same seed will always generate the exact same set of private keys, public keys, and addresses.
What this means is that 12 to 24 words held in your possession can secure your entire bitcoin wealth. It’s a way to hold money independent of any bank or custodian and be entirely financially autonomous. Seed phrases offer several advantages:
Randomly generated seed phrases are extremely secure due to the vast number of possible combinations.
In binary, each bit can be either 1
or 0
. For a 24-word seed phrase, which comes from 256-bits of randomness, there are 2²⁵⁶ possible combinations. This means seed phrases represent unique numbers within an unimaginably vast range of possibilities:
To put this into perspective, a random 256-bit number is a number between 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. For context, there are more possible combinations than there are atoms in 100 billion galaxies (atoms mind you, not stars). Even with all the computation power in the world, successfully finding someone’s random seed phrase through “brute force” guessing is for all intents and purposes impossible.
It’s not a needle in a haystack, it’s an atom in a universe. This asymmetry between the ease of generating a seed phrase and the sheer impossibility of guessing it is a security feature of Bitcoin.
Seed phrase security is less about any human or computer guessing your phrase, and more about someone stealing it. When you take self-custody of your bitcoin, you must take utmost care to safeguard your seed phrase from theft, loss, or damage. You can read more about best practices for how to secure your private keys and seed phrase here.
© 2024 NMLS ID 1902919 (Zap Solutions, Inc.)