INSUBCONTINENT EXCLUSIVE:
Meaning and importance of a seed phrase explained A seed phrase (also known as a wallet recovery phrase, mnemonic
important? These words are used to derive your private keys, allowing access to your cryptocurrency holdings
human-readable backup of your private keys, the cryptographic keys controlling your wallet and its contents
your seed phrase into a compatible wallet app
Regaining access is almost impossible without it, and you risk losing your funds.For example, in 2013, James Howells threw away a hard drive
containing the private keys to his Bitcoin wallet
The wallet held about 8,000 Bitcoin (BTC), worth $859.7 million as of Dec
Without his Bitcoin seed phrase, he could not recover his assets, which were lost in a landfill
introduced the concept of seed phrases in 2012
your private keys easier by introducing seed phrases
Since then, the seed phrase has become integral to the cryptocurrency world
How seed phrases work Seed phrases enable users to easily and securely back up private keys and manage their
digital assets.When you create a wallet, it generates a seed phrase through BIP-39 (Bitcoin Improvement Proposal 39), which starts with a
cryptographic purposes yet can be easily remembered.Once generated, this seed phrase is your blueprint; it allows you to regenerate your
For example, your seed phrase might look something like this:castle ginger apple mystery spider clock mountain sky oceanEach word helps make
up your private key, allowing access to your wallet
your wallet and access your funds no matter where you enter it, whether a new device or wallet application
How do seed phrases, private keys, and wallet addresses relate? Think of your cryptocurrency wallet as a safe
where your private keys and wallet address are stored
and wallet addresses:Seed phrase: These are the human-readable backups of your private keys that enable you to recover your crypto wallet in
case of loss.Private keys: Your seed phrase generates your private keys; your wallet is controlled by these cryptographic keys that allow
that others use to send you cryptocurrency
For example, when someone wants to send you Bitcoin, they need your wallet address.Did you know? While deriving the public key from the
impossible due to the inherent complexity of the cryptographic algorithm
phrase could be compromised:Phishing attacks:Hackers can trick you into entering your seed phrase on a fake website or app.Insecure backups:
Storing your seed phrase in easily accessible or online locations (like cloud storage or unencrypted text files) makes it vulnerable to
hacking.Malware: If your device gets infected with malware, it might log your keystrokes or access files where your seed phrase is
stored.Social engineering: Hackers might attempt to gain your trust and convince you to share your seed phrase under false pretenses,
claiming they need it for support or troubleshooting
What happens if you lose a seed phrase? Unfortunately, once the seed phrase is lost and no backups are available,
your seed phrase and how third-party services might help in some cases.No recovery in case of non-custodial wallets: Non-custodial wallets
This means you cannot regenerate your private keys, meaning you cannot access or recover your funds.Possibility of recovery through a
provider in case of custodial wallets: In custodial wallets, a third-party provider (like Coinbase or Binance) holds control over your
In the event you lose your seed phrase, the provider may help you recover your wallet using account credentials, email recovery or other
assist in wallet recovery
seed phrase or private keys incorrectly
Many of these services are scam-prone, so remember to thoroughly test their genuineness
How to safely store and back up your seed phrase Storing your wallet recovery phrase offline (e.g., in a hardware
wallet) or at multiple locations are ways to safely store and back up your seed phrase.Here are some tips to ensure your cryptocurrency
wallet security:Offline storage: Internet-connected devices expose your seed phrases to cyber threats, so store them as physical copies in a
safe deposit box or fireproof safe or write them down on paper
The risks of online attacks can also be reduced by using hardware wallets
Still, these are commercialized devices whose security depends upon the measures taken by wallet providers.Multisignature wallets: A
multisignature wallet requires multiple private keys (and, therefore, multiple seed phrases) to authorize a transaction
For example, you could store your seed phrase in multiple locations, and to perform any action (like sending crypto), you would need access
to at least two or three of them, adding a level of redundancy and making it significantly harder for someone to access your wallet with
just one stolen backup of your seed phrase.Geographical separation of backups: The risk of losing funds is further reduced by keeping your
seed phrases in separate locations, such as a personal safe, a safety deposit box in a different city or country, or entrusting a trusted
This redundancy ensures access to your funds even in unforeseen circumstances or emergencies.Regularly test and update your backups: After
safely storing your seed phrase, periodically review and update your backups
Documents might deteriorate over time, and you might discover that your backup is unreadable
To ensure everything is working properly, test your recovery process regularly by recovering your wallet from the seed phrase
Additionally, update your backups to reflect any changes if you replace your wallet or devices.Be cautious about sharing your recovery
If you are using a hardware wallet, not even the wallet provider should know it
Similarly, customer service representatives of legitimate products and services will never ask for your seed phrase
Thus, be careful, as phishing attacks can mimic wallet interfaces, tricking you into entering your seed phrase on malicious websites or
apps.Each method provides layers of security but also comes with trade-offs regarding convenience and risk management
