Seed Phrase

When you create a wallet of your own, you will often see 12 or 24 words and a request to write them down. Their purpose becomes clear when your phone breaks or your Hardware Wallet stops working. Your bitcoin has not disappeared with the device: its records remain on the Bitcoin network. What you restore are the keys that let you spend it. A complete backup and a compatible wallet make this possible on another device. With an exchange account, however, the operator usually manages the keys; the account password is something different. [4] [6]

The words are not labels for individual coins. The wallet uses them as a common starting point to create many private keys and addresses according to fixed rules. A wallet that works this way is called an HD Wallet. The same backup therefore usually covers addresses the wallet creates later. There is a downside: someone who obtains your words does not need to steal your phone or know its PIN. For an ordinary wallet without an additional passphrase, they can derive the same keys. Passphrase and Multisig introduce further conditions, which we will come to shortly. [6] [1]

A new backup should be generated in a trustworthy wallet from good randomness. Do not choose your own favourite words or a sentence from a book. Be equally wary of a device supplied with a completed backup: whoever prepared it may know it. Do not send your words to support or enter them on a website promising repairs, synchronisation or unlocking. A legitimate support worker does not need them. Wallet recovery is a process you initiate yourself, following verified instructions. [1] [4]

Write down every word exactly and in the correct order; do not translate them. Paper is simple, while durable metal can help against fire or water. Neither stops someone from reading an accessible backup. Choose its location with both loss and unwanted access in mind; another copy reduces dependence on one place but creates another secret to protect. Photos and ordinary cloud storage add digital copies that are easy to forget. Offline storage is a more manageable starting point for beginners. [4] [1]

A neatly written sheet does not prove that you copied everything correctly. Some Hardware Wallet devices offer an on-device backup check without erasing the wallet; Trezor Model T is one example. Follow the official procedure for your particular model. Do not erase your only working wallet just to test it. During an actual recovery, also check that the expected addresses or a known small balance reappear. An app accepting the words does not, by itself, confirm the correct passphrase or account settings. [3] [1]

A PIN usually protects access to a particular device. A Seed Phrase lets you recreate the keys outside it. An optional BIP39 passphrase, by contrast, takes part in deriving the wallet itself: to restore that wallet, you need both the words and the passphrase. An incorrect passphrase will generally open a different, empty wallet rather than produce a password error. It is not a mandatory “25th word” from the list. If you use one, keep an exact, separate backup; support cannot reset it if it is lost. [1]

BIP39 is a common recovery-word format, but not every wallet uses it. Electrum has its own system. SLIP39 lets a backup be divided into shares and specifies how many are needed for recovery. This is different from cutting a word list into pieces. Alongside the words, keep the original wallet name, backup format and necessary account settings. These include the derivation path, which tells the wallet where to look for keys, and the address type. Multisig uses several keys and a specified number of signatures. Restoring the full setup requires more than one signer’s backup: you also need the other public keys and the signature rule. An Output Descriptor can record this information in a machine-readable description of keys and spending rules. An empty balance after import does not necessarily mean your bitcoin has disappeared. [1] [7] [8] [2]

If the device stops working and the backup remains secret, you need to restore access. But if someone has seen the words or you entered them on a fraudulent website, they may have their own copy of the keys. Restoring the same words or changing the PIN does not take that copy away. Exposed funds need to be moved safely to newly generated keys; with Multisig, the response depends on the full signing policy. If you lose every backup and access to a working wallet, recovery may no longer be possible. Recovery cannot bring back bitcoin that has already been stolen. [5] [2]

BIP39 encodes random bits and a short checksum using a list of 2048 words. Twelve words represent 128 random bits and 4 checksum bits; 24 words represent 256 and 8 bits. The check catches some mistakes, but cannot confirm safe generation or detect someone else’s copy. A computational function called PBKDF2 then derives a 512-bit seed from the words and any passphrase. This seed is the starting data for generating keys. A longer result does not make the original words less predictable; in this context, that unpredictability is called entropy. More words therefore cannot fix poor randomness or an exposed backup. [1]