A seed phrase is the list of 12 or 24 words a wallet shows you once, at setup, with a request to “store it safely”. Many people skip past that screen, take a screenshot or type the words into their phone’s notes. Later they discover that those words were the wallet: whoever knows them owns every coin, and whoever loses them loses access to the funds forever.
In this guide we explain in plain language what a seed phrase is (also called a mnemonic phrase, recovery phrase or secret recovery phrase), how it works technically, how it differs from a password and a private key, how to store and test it properly, what to do if it is compromised, and how to avoid scammers’ tricks. It is useful both for beginners and for experienced users holding significant amounts.
- What is a seed phrase
- How a seed phrase works: the BIP-39 standard
- Seed phrase vs private key vs password
- 12 or 24 words: which is safer
- The optional passphrase (“25th word”)
- Storage methods compared
- How to write down and store a seed phrase
- How to check that your backup works
- Seed phrases and inheritance
- How scammers hunt for seed phrases
- What to do if your phrase is compromised
- FAQ
- Conclusion
- Sources
What is a seed phrase
A seed phrase is the human-readable form of a wallet’s master secret. Every private key and address your non-custodial wallet uses is mathematically derived from it. If you are not yet clear on the difference between custodial and non-custodial wallets, start with what is a crypto wallet.
The crucial property to understand is that the seed phrase is access to the money. The app, the phone, the hardware device are just convenient tools. They can be lost, broken or replaced. If the phrase is safe, you install any compatible wallet, enter the words and see your funds. If a stranger gets the phrase, they can do exactly the same, and no PIN on your phone will stop them.
A non-custodial wallet has no support desk that can “reset your password” and no bank that can reverse a transfer. Responsibility for the seed phrase rests entirely with its owner.
How a seed phrase works: the BIP-39 standard
Most modern wallets use the BIP-39 standard, proposed in 2013 through the Bitcoin Improvement Proposal process. The scheme looks like this:
- The wallet generates a random number — entropy — of 128 bits (for 12 words) or 256 bits (for 24 words).
- A checksum is appended: the first bits of the entropy’s SHA-256 hash, 4 bits for 12 words and 8 bits for 24 words.
- The resulting sequence is split into 11-bit groups, and each group maps to a word from a list of 2,048 words (2,048 = 2 to the 11th power).
- The phrase is run through PBKDF2 (2,048 iterations of HMAC-SHA512) to produce a 512-bit seed, from which a tree of keys is derived under BIP-32.
Several practical conclusions follow. First, word order matters: the same words in a different order produce a different wallet or fail validation. Second, the last word partly encodes the checksum, so a random set of words is almost never a valid phrase — which guards against typos. Third, every word in the English BIP-39 list is uniquely identified by its first four letters, which makes stamping it on metal easier.
The standard includes official word lists in several languages, but in practice nearly all wallets use the English list. Write the phrase in the language your wallet displayed, and never translate the words.
It is also worth knowing about derivation paths (BIP-44 and related standards). Different wallets may derive addresses along different paths, so restoring the same phrase in another app sometimes shows an “empty” balance. The funds are still there — you just need to sеlect a different path or address type in the settings. Some wallets also use their own phrase format that is not BIP-39-compatible, such as Electrum, or Monero with its 25-word phrase.
Seed phrase vs private key vs password
These concepts are often confused, yet they play different roles.
| Parameter | Seed phrase | Private key | App password or PIN |
|---|---|---|---|
| What it unlocks | The whole wallet: every network and address | One specific address | Only the app on one device |
| Format | 12, 18 or 24 words | A long string of characters | Any characters or digits |
| Recoverable if lost | No | Yes, if you have the seed phrase | Yes, by restoring from the phrase again |
| Impact of a leak | Critical: loss of all funds | High: loss of funds at that address | Low without physical access to the device |
Put simply, a PIN protects the door to one apartment, while a seed phrase is the blueprint for cutting keys to all your apartments in every city.
12 or 24 words: which is safer
A 12-word phrase contains 128 bits of entropy; a 24-word phrase contains 256 bits. Even 128 bits is such an enormous search space that brute-forcing the right phrase with current technology is practically impossible. So for most users 12 words are enough, and the real threats are leaks and loss, not brute force.
24 words give an extra security margin and are the default on several hardware wallets. The downside is more words to record without mistakes. Use the length your wallet offers and focus on storing it properly.
The optional passphrase (“25th word”)
BIP-39 allows an optional passphrase, often called the “25th word”. It is combined with the seed phrase when the seed is computed. Every passphrase creates a completely different wallet: phrase + “password1” and phrase + “password2” open different sets of addresses.
Why use it? If someone finds your written seed phrase, without the passphrase they only reach the “base” wallet, while your main funds stay out of reach. Some people use this to keep a decoy wallet with a small balance.
But a passphrase carries a serious risk: forget it and the funds are gone for good, even if you still have the seed phrase. It cannot be reset, and a strong one cannot be guessed. So the passphrase is stored separately from the seed phrase and just as securely. This feature suits experienced users; beginners are better off starting without it.
Storage methods compared
| Method | Protection from online theft | Protection from fire and water | Complexity | Comment |
|---|---|---|---|---|
| Screenshot, notes, cloud, messenger | No | Yes | Low | The most dangerous option; never use it |
| Paper at home | Yes | No | Low | Acceptable for small sums, ideally two copies |
| Metal plate | Yes | High | Medium | A good choice for long-term storage |
| Copies in two separate locations | Yes | High | Medium | Protects against a local disaster but raises the risk of discovery |
| Shamir Backup (SLIP-39) | Yes | High | High | The secret is split into shares; only a threshold is needed to recover |
| Multisig | Yes | High | High | Several independent phrases; one leak is not fatal |
Note that cutting a phrase in half yourself is not recommended. Each half reveals part of the secret and weakens it, while losing either half locks you out. If you need a distributed scheme, use standards built for it — SLIP-39 (Shamir Backup) or multisig.
How to write down and store a seed phrase
- Create the wallet in a calm setting, with no one else and no cameras in view.
- Write by hand on the card that came with your hardware wallet or on a clean sheet of paper. No printers and no typing on a computer.
- Number the words and write legibly in block letters. Check each word against the screen twice.
- Never store the phrase digitally: no photos, files, cloud storage, password managers or emails to yourself.
- For larger sums, transfer it to metal — an engraved or stamped plate. It survives fire and flood far better than paper.
- Choose a storage location known only to you or trusted people: a home safe, a bank safe-deposit box, a well-hidden spot.
- Do not label it “Bitcoin seed phrase”. The less obvious the purpose of the note, the better.
Hardware wallets make this process safer: the phrase is generated on the device and shown on its own screen, never touching your computer. For a comparison of popular devices, see Ledger vs Trezor.
How to check that your backup works
A backup you have never tested is a hope, not protection. Test it right after creating the wallet, while it holds no funds or only a small amount.
- Write down the first receiving address of the new wallet.
- dеlete the wallet from the app or reset the hardware device (only if you are certain the phrase is recorded).
- Restore the wallet from your written phrase.
- Confirm the first address matches the one you noted.
- Many hardware wallets can verify the phrase without a reset, using a built-in backup check.
Once the test passes, you can move your main funds. You might, for example, fund the new wallet with a swap: on RubyCash coins are sent straight to your address without creating an account, so you only need to enter the address of the wallet you just verified.
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Seed phrases and inheritance
Crypto without access to its seed phrase cannot be inherited: if the owner left no instructions, relatives cannot reach the funds even if they know they exist. Yet handing over the phrase in advance means complete trust.
Common approaches: keep the phrase in a bank safe-deposit box with access arranged for heirs; leave instructions on where the phrase is kept — not the phrase itself — with a notary or in a will; or use multisig or Shamir Backup, distributing shares among trusted people so that no single person can move the funds alone. Be sure to tell your heirs which wallet was used and whether a passphrase is required.
How scammers hunt for seed phrases
The seed phrase is attackers’ number-one target, and there are many ways they try to extract it. For a detailed overview, read crypto scams: the most common schemes. The most frequent ones:
- Fake support. After you complain on social media, a “staff member” messages you and asks for the phrase to “sync” or “unlock” your wallet.
- Phishing sites and apps. Copies of well-known wallets offer to “restore access” and send the words you enter to criminals.
- Counterfeit hardware wallets shipped with a “pre-generated” phrase. A genuine device always generates the phrase itself.
- “Wallet verification” emails impersonating manufacturers and demanding that you enter your phrase.
- “Free” wallets with a balance. A scammer “accidentally” posts a phrase to a wallet holding valuable tokens; withdrawing them requires topping up gas, which a bot instantly sweeps away.
There is one rule: the seed phrase is entered only into the wallet itself during recovery — never on websites, forms or chats, and never at anyone’s request.
What to do if your phrase is compromised
If you suspect someone saw or photographed your phrase, or you entered it on a suspicious site, act immediately:
- Create a new wallet with a new seed phrase on a trusted device and record it offline.
- Move all funds from the old wallet to the new one, starting with the most valuable assets. Keep some of the network coin for fees.
- Revoke token approvals granted from the old addresses on EVM networks, if still possible.
- Never use the old phrase again, not even for small amounts.
- Scan your device for malware if the leak may have happened through it.
Speed is everything: attackers often use bots that drain funds within minutes of arrival. For broader protection, read how to protect your crypto.
FAQ
It is a set of 12 or 24 words from which your wallet computes all your private keys. Anyone who knows the seed phrase can restore the wallet on any device and control the funds.
No. If you still have access to the wallet, create a new one immediately, write down its phrase and move your funds there. If you have no access and the phrase is lost, the funds in a non-custodial wallet cannot be recovered.
It is better than notes or a screenshot, but it is still a digital copy that is exposed if the account or device is compromised. For meaningful amounts, only offline storage on paper or metal is recommended.
The wallet will either reject the phrase because the checksum does not match or restore a different, empty wallet. That is why you should number the words and double-check the order when writing them down.
If both wallets support BIP-39 and the networks you need, usually yes. Because of different derivation paths, balances may not appear right away, and some wallets use their own phrase formats that are not BIP-39-compatible.
No. On an exchange, the platform manages the keys and you sign in with a username, password and two-factor authentication. Seed phrases only exist in non-custodial wallets.
12 words correspond to 128 bits of entropy and 24 words to 256 bits. Both are practically impossible to brute-force, so the real risk comes from leaking or losing the phrase, not from its length.
It is the optional BIP-39 passphrase that, combined with your seed phrase, creates a separate wallet. It protects you if someone finds your written phrase, but if you forget it, the funds are lost permanently.
Conclusion
A seed phrase is not a formality during app setup — it is the key to your money itself. It lets you restore your wallet after losing a device, and at the same time gives full access to anyone who learns it.
Handling it correctly comes down to a few rules: write it by hand without mistakes, never store it digitally, use metal and well-designed schemes such as Shamir Backup or multisig for larger sums, test recovery in advance, and never share the words with anyone.
Spend one calm evening on your backup. It is the most valuable investment of time you can make in crypto.