What Is a Seed Phrase and Why Is It Important?
A seed phrase, also known as a recovery phrase, is a list of 12 to 24 words that represents the master key to a non-custodial crypto wallet. It is generated when a new wallet is created and can be used to restore access to the wallet and all its funds on any compatible device.
The seed phrase is critically important because anyone who has it can control the associated funds. It is the ultimate backup, and its security is the sole responsibility of the user.
Losing the seed phrase means losing access to the wallet forever.
Glossar
Seed
Genesis ⎊ A seed in cryptocurrency contexts typically denotes the initial state or foundational elements of a blockchain or decentralized application, representing the origin point for subsequent transactions and data structures.
Bip39 Standard
Mnemonic ⎊ The Bip39 Standard defines a specific set of 2048 words used to generate a human-readable seed phrase, which is the entropy source for private key generation.
Master Key
Authority ⎊ The Master Key, often referred to as the master private key, is the single, top-level cryptographic secret within a Hierarchical Deterministic (HD) wallet structure.
Private Key
Ownership ⎊ The private key is the definitive proof of non-custodial ownership over the associated cryptocurrency or the collateral securing a derivative position.
Seed Phrase
Genesis ⎊ Within the context of cryptocurrency, options trading, and financial derivatives, a seed phrase represents the cryptographic bedrock underpinning wallet security and asset control.