What Is a Crypto Seed?


What Is a Crypto Seed?

Buyers of crypto are most likely aware of the private key associated with their currencies, NFTs, and other assets, but what other security measures exist to ensure rightful ownership? Crypto seeds and seed phrases offer crypto owners a viable backup that they can use in their hardware wallets or offline storage vehicles.

What Is a Crypto Seed?

A crypto seed phrase, otherwise known as a seed backup, recovery phrase, seed words, mnemonic phrase, or secret words, is the combination of 12 or 24 words used as a backup when users set up a Bitcoin or cryptocurrency hardware wallet. More specifically, a seed phrase is an easily remembered representation of a seed, which is really just a long string of random digits. The crypto industry recognized that it would be easier for users to memorize and/or store crypto seed phrases than the actual crypto seeds.

Different wallets and wallet types have different backup processes, and it is quite possible that software wallets or “hot” wallets do not prompt account holders to physically back up a seed phrase. For the most security, users should back up their crypto in hardware or “cold” wallets or in some type of offline, physical location. Most hardware wallets make it very difficult to initialize the wallet without physically backing up a seed phrase. 

Seed phrases generated by wallets that follow the latest cryptocurrency standards pulled from a list of 2,048 unique words established as part of Bitcoin Improvement Proposal 39, or BIP39, explains Unchained Capital. Each word represents a range of bits in that long, random number that is your seed.

How Do Crypto Seeds Work?

Seed phrases are generated by the wallet at the time of account setup. Users should then secure this seed phrase for safekeeping in case they ever need to recover their wallet, at which point they would use these words for that purpose.

The 24 words of the crypto seed phrase represent the random digits of the underlying crypto seed, from which all the keys in the wallet are derived. The seed is used to generate the user’s master private key, which generates the rest of the user’s private keys. The private keys are then used to generate corresponding public keys. 

Therein lies the risk of losing access to one’s crypto seed phrase: malicious actors with access to the seed phrase can quickly gain access to the user’s private keys and thereby their crypto assets. 

How To Store Your Crypto Seeds Safely

There exist several strategies to keep your crypto seed phrases safe. Let’s have a look at a few of these.

Seed Phrase Splitting

​​Seed splitting involves separating seed phrases into two or more lists and storing each section securely. This can be carried out both virtually and physically, though physical storage tends to be safer. 

Physical Storage in a Steel Plate or Capsule

While security keys can serve as a physical location on which to store crypto seed phrases, they can still be lost, stolen, or compromised. 

A better solution is the use of steel plates and capsules that allow users to physically store their seed phrases, or split seed phrases, easily and securely. A steel capsule works by separating each word of the user’s seed phrase using both character plates and separator plates, according to MakeUseOf.com. It then securely locks them in using a deep thread that holds the capsule’s shell and core together.

Additional Security for Crypto Assets

As noted above, once a crypto seed phrase is lost or stolen, it is quite possible that a criminal may gain unlawful access to the user’s private keys. Once someone obtains the crypto’s private keys, it may be hard for the real owner to have recourse or even prove their ownership.

Cold hardware wallets certainly add heightened security for crypto owners, but extra protection is needed. As the industry evolves, third-party services have emerged to help investors protect their crypto wherever that crypto is stored, including wallets, platforms and exchanges. TransitNet is creating the industry’s first third-party title registry that demonstrates proof of ownership of crypto assets that is currency-agnostic and that can be used for a wide range of digital currencies and other crypto assets.  Join the forefront of the new crypto infrastructure.  Request an exclusive registration for TransitNet’s offchain title registry when it launches today.

Jake Wengroff writes about technology and financial services. A former technology reporter for CBS Radio, he covers such topics as security, mobility, e-commerce and the Internet of Things.


Unchained Capital – What is a bitcoin seed phrase and how does it work?

Unchained Capital – The ultimate guide to storing your bitcoin seed phrase backups

MakeUseOf.com – 4 Ways to Store Your Crypto Seed Phrases Securely

Ledger – How to Protect Your Seed Phrase?

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