There have been sad incidents where crypto users lose their hardware wallets to theft or technical fault, their computers crash or their phones are destroyed. In the case of these unfortunate circumstances, one will likely lose access to his crypto wallets temporarily, but with the wallet’s seed phrase, he can easily recover the wallet on a new device with all cryptocurrency still intact.

Therefore, the seed phrase or recovery phrase is a layer of security that serves as a defence, preventing one from losing complete access to one’s crypto wallet in the case of any unforeseen damage to the device or hardware wallet, just mentioned above.

Every user is assigned a seed phrase after creating a crypto wallet which he either knows by heart or saves it somewhere it can be permanently safe.

In this article, we will discuss the meaning of a seed phrase, how a seed phrase works, what a seed phrase looks like and how to keep your seed phrase safe.

What Is A Seed Phrase?

A seed phrase is different from a crypto password. A seed phrase is a  group of random words that serves as a master password for your crypto wallet. That is to say that the seed phrase is the last layer of security on your crypto wallet. The seed phrase is generated by your crypto wallet when you set it up and can be used to gain access to your wallet in case you lose access to your hardware wallet, or device or you forget your password.

However, a similar security key called private keys should not be confused with a seed phrase. Private keys are just alphanumeric sequences that allow users to complete crypto transactions on their crypto wallets. 

A private key and a seed phrase are both important and should be protected at all costs. Should they ever fall in the wrong hands, they can be used to create a copy of the wallet and drain the funds.

Seed Phrase VS Private Key

Even though we have given a hint of the distinction between a private key and a seed phrase in the previous section, there’s a need to lay further emphasis on that. 

A seed phrase is a cryptocurrency wallet recovery password. That is, the seed phrase is a password required to recover a crypto wallet in case of any damage on the device or loss of the device. 

The seed phrase is the master key to all your crypto accounts and also allows you to gain access to the private keys stored in those accounts. 

Therefore seed phrase gives you control over all your assets and allows you to recover them in the event of any damage to your hardware wallet or device.

A private key is used for facilitating cryptocurrency transactions by proving ownership of the wallet when he inputs the private keys.

How Does A Seed Phrase Work?

Unlike popular belief that crypto is stored in the crypto wallet, crypto isn’t really stored within a crypto wallet. 

Cryptocurrency is data securely stored in a blockchain meaning that even if there’s a breach on your crypto wallet, the data which represents the cryptocurrency(funds) are still recorded securely on the digital ledger of the blockchain.

Whenever a new crypto wallet is created, whether a hot wallet, cold wallet or a web wallet, seed phrases are generated too. 

The phrases are derived from a list of 2,048 English words known as the BIP39 standard offering 128-bit encryption. This is the standard adopted by many leading crypto wallets. Every seed phrase is unique to the wallet that created it and they are either 12 or 24 words which must be entered in the same order in which they were provided.

The words in a seed phrase are programmed to correspond to strings of random digits called a seed which will generate the user’s private master key which will further generate the rest of the user’s private keys. 

In case of wallet recovery, the option for using seed phrases to recover a wallet is normally found within the setting button of the wallet. 

Can A Seed Phrase Be Hacked?

It’s almost very impossible to separate crypto fraudsters from the crypto space, especially in this digital world. 

Just like mentioned earlier, a seed phrase is the master key to a crypto wallet, which means that it should never be in the custody of someone you don’t trust or want to give access to your crypto wallet. 

A seed phrase is a combination of about 12-24 different words, it is highly impossible to hack.

However, crypto hackers would always use the “phishing scam method” to take advantage of the ignorant ones. Phishing is a strategy used by scammers to gain access to crypto wallets. They send emails to crypto users, disguised as customer support and ask for your seed phrase or private key. Should one give out this information to them, they will access the crypto wallet and steal everything in it. Therefore, never share your seed phrase with anyone or expose it carelessly.

How Should I Store My Seed Phrase?

In order not to lose the fortune in your crypto wallet by exposing your seed phrase to dangers, it is important that store the seed phrase where no harm can come close.

It is not a good decision to store the seed phrase digitally even if it is protected with a password. It could be exposed to hackers if the device ever goes online.

A good option for crypto users is to memorise their seed phrase until they can remember it r all by heart. However, human memory is imperfect so the best safety measure is to write down the seed phrase on a paper and guard the paper as you’d guard your life. You can keep the paper in a safe box completely immune to any destruction like fire, flood or anything that could destroy it and make the phrase unreadable.

There’s another cheap option for you if buying a safe box is ineffective for you. You can use a steel wallet which is approximately the same size as a credit card. 

Steel wallets are constructed with lettered tiles made to slip into built-in tracks, allowing users to spell out their seed phrase. 

Additionally, a steel wallet is immune to fire, flood, rust and more which makes it significantly more durable than paper. 


In summary, crypto assets are stored on the blockchain ledger as data and entering the seed phrase correctly will generate the user’s private master key which will further generate the user’s private keys to give them access to the funds.

The security of a seed phrase is paramount as it is the master key for accessing a crypto wallet and every crypto asset in such a wallet.