What is a Seed Phrase?

A seed phrase (also called seed recovery phrase, backup seed phrase, mnemonic seed or mnemonic phrase) is a method to access and recover a cryptocurrency wallet. It is not linked to a particular cryptocurrency, and can be used to access an entire portfolio of cryptocurrencies like Bitcoin and Ether and other blockchain-based assets.

It is a random sequence of words, usually 12 or 24, taken from a list of 2,048 English words. In a nutshell this sequence, entered in the right order, is converted using formulas to numbers that gives access to a wallet and the public key - private key pairs that it contains.

Therefore, keeping a seed phrase private and ensuring that it won't be lost is critical, as it is the only way to access and recover a wallet and all of its content. Anyone getting access to a seed phrase can take control of its wallet's content and transfer it elsewhere, an operation that cannot be reverted due to blockchain's nature.

Backing Up a Seed Phrase

As explained above, backing up a seed phrase properly is extremely important. Here are the most common ways to do it, and which ones are best practices.

The wrong way: storing the seed phrase on a connected device

Storing a seed phrase on a device that is connected to Internet (a computer, a tablet, a smartphone) or on the cloud itself, for instance in an email or in a text file, is dangerous as connected devices are usually unsafe and can be hacked relatively easily.

It is therefore strongly recommended to not store a seed phrase on any medium that is or can be connected to Internet.

The good way: writing down the seed phrase

Since a seed phrase needs to be stored on an offline support, the natural method is simply to write it down and store it in a secure place.

Ideally, the seed phrase would need to be written down on a support that isn't vulnerable to common damage like humidity or fire. Paper is not a good choice, as it decays easily. A better solution that you can find online are products to write your seed phrase on a stainless steel plate.

Finally, where you store your seed phrase matters too. If the amounts stored on your wallet are critical for you, you may consider storing your seed phrase in a secure place such as a bank vault.

The better way: using a hardware wallet

While you should write down your seed phrase as described above in any case, it is today best practice to combine that method with the usage of a hardware wallet.

In this way, you can conveniently access your wallet and sign transactions with your hardware wallet, without having to touch your seed phrase backup which remains in its secure storage place.

The Split Seed Phrase

A split seed phrase is a backup method that generates a 100-words seed phrase and splits it in 5 pieces, which are then distributed among a group of 5 different storage nodes.

The seed phrase can only be reconstructed when at least 3 pieces are combined together.

This method is more secure than a regular seed phrase. It is a good trade-off to mitigate the risk of theft and the risk of loss/destruction of the seed phrase.