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Seed phrases

What is a seed phrase? #

Your seed phrase or seed is the basis of all the private keys, followed by public keys, you need have for sending, receiving and storing crypto. Each crypto address that you create from this seed is unique – For every new address, the seed generates a new private key and public key. By doing so, you are able to send and receive crypto transactions from unique and different addresses linked to your wallet, guaranteeing your privacy.

To put everything in perspective:
Seed (phrase) à private key à public key (bitcoin address or other cryptocurrency address).

The wallet you use generates a new public address for receiving -for example- bitcoins for every transaction. By doing so, it guarantees your financial privacy on the Bitcoin blockchain. For every new public key (address), a new private key is generated. This is done automatically for you, using the wallet seed.

The seed, also called the Master Seed, is in fact the essential private key of your Bitcoin wallet that generates and keeps track of all other new public and private keys. Technically, the seed key generates a special ECDSA private key that underlies all keys within your Bitcoin wallet. You could think of it as the original master key. It is the original seed with which the wallet software can generate keys for easily receiving and sending the bitcoins.

Thanks to an algorithm, this original master key is encrypted and converted into a mnemonic that is easy for people to remember. It is these words that you write down on paper or engrave in indestructible titanium while setting up your Bitcoin wallet. Forgetting or losing these words would cause issues, because you will not be able to get in your wallet anymore.

It is also important to make sure that your seed phrases are not on a device that may be readable by malware, because that could cause a hack into your wallet. Because of this reason it is important to set up a Bitcoin wallet on a clean and malware-free computer. It is best to set up a separate computer with a VPN program. if you plan to invest a lot of money in Bitcoin for example, you will also have to invest money in a hardware wallet (such as a Ledger or Trezor).

To summarize, these words represent the main original master key or seed key that will eventually create all the keys within your crypto wallet. With this seed you can always restore your crypto wallet when it is lost or broken. Hence it is also called a recovery seed.

How a seed phrase is created #

When you create a wallet, a random number is generated. This forms the basis of all your private keys. The reason it is completely random is that it is difficult to crack.

It is not possible to create a seed phrase by yourself. The seed phrase is automatically generated by the blockchain and linked to your wallet. Typically, seed phrases consist out of 12, 24 and sometimes even more words. By translating the seed phrase to readable words, it becomes easier to copy, write down or save the recovery seed successfully. Although the words are completely random generated, they come from a predefined list of 2048 words.

Updated on July 21, 2021
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