Seed Phrases

Seed phrases are the sets of keywords that are required to restore your wallet access when you change your device or forget your password.

These phrases are derived from a long list of binary digits (0s and 1s) through algorithms like BIP39 (used in Bitcoin and Ethereum).

How Do Seed Phrases Work?

Simplified Explanation

Imagine the seed phrase as a “master key” made up of a few simple words like “dog,” “apple,” and “beach.” Like a key unlocks a door, this unique word combination can unlock your crypto wallet on any device.

Though these private keys are generated for all kinds of wallets, custodial and non-custodial wallets. In case of custodial wallets, you see them while creating one, and in case of a non-custodial wallet, your wallet provider (mostly exchanges) has them.

Here’s how it works:

1. Creating Your Wallet: When you make a crypto wallet, the app gives you 12-24 random words as a “seed phrase.” Write them down because they’re the backup to your wallet.
2. How It Secures Your Funds: These words are like a code that can recreate your wallet and all its addresses. Lose the words, and you lose access to your wallet.
3. Restoring Access Anywhere: If you switch devices or lose your phone, you can use these words to get back into your wallet instantly.

Technical Explanation

1. Seed Phrase Generation:
   • When a crypto wallet is created, a random number is generated, typically through a standardized protocol (like BIP-39 for Bitcoin and Ethereum wallets).
   • This number is then converted into a set of 12, 18, or 24 English words that act as the “seed phrase.”
2. Seed Phrase to Private Key Conversion:
   • The seed phrase is converted into a “seed” (a long string of binary data{0s and 1s}) using a hashing algorithm like PBKDF2.
   • The seed is then used to generate a private key, which unlocks access to the crypto wallet.
   • Hierarchical Deterministic (HD) Wallets: These wallets can generate multiple private keys from a single seed. This allows for creating multiple crypto addresses from the same seed phrase, making it easy to manage funds under one recovery option.
3. Restoring a Wallet:
   • When the seed phrase is re-entered in any compatible wallet app, the same private keys and addresses are regenerated, providing access to the stored crypto assets.

Example

For example, see below the long string and the seed phrases generated from it using BIP-39 algorithm.

Binary String

Note: The example shown below is a randomly generated BIP-39 seed phrase and does not represent any wallet or address. This is a dummy number for demonstration only.

The zeroes and ones you seen below are the first things to be generated.

Binary Format: 11110000110 00010001110 00001111000 11111000101 00100110100 01100010101 01010011111 11101000111 11011100101 01010000001 11010100100 01010110100 10011110000 10110110011 10001011001 00001000000 11110100111 00011111100 11111111000 11011011100 01101101010 00111110000 10101101101 000

This is then converted into this Hexadecimal format.

Hexadecimal Format: f0c2383c7c5268c554ff47dcaa07522b49e16ce2c840f4e3f3fc6dc6d47c2b68

Seed

The string is then converted into BIP39 format (shown below) to check that its correct.

BIP-39 Seed:

84840d68d05faf11bb517b0e7059fd6e5be453599b2928dd4bb12686726965f4bcd04e69405084fa798f508340c00fd16d354a45d86b5bda86c8dad1888bf891

This BIP-39 seed is then converted into individual seed phrases as shown below.

Seed Phrases

1. valid
2. balcony
3. audit
4. weather
5. charge
6. glance
7. fault
8. trophy
9. syrup
10. expand
11. stand
12. final
13. own
14. reopen
15. menu
16. amount
17. visual
18. buzz
19. yellow
20. swear
21. hood
22. dignity
23. pumpkin
24. black