Crypto glossary

Seed Phrase

A seed phrase, also called a recovery phrase, is a list of usually 12 or 24 words that encodes the master secret of a crypto wallet. With it, the wallet and all its keys and addresses can be restored on any compatible device.

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How a seed phrase works

When you create a self-custody wallet, it generates a large random number and turns it into words from a standard list of 2,048 English words, defined in a widely used standard called BIP-39. The words are simply a human-friendly way to write down that number.

From this one secret, the wallet derives a master key and from that a whole tree of private keys and addresses, one for each account and coin. That is why a single phrase can restore everything in the wallet, across many blockchains, on a new device.

Why it is so powerful

Whoever has your seed phrase has your crypto. There is no password reset, no bank to call and no way to reverse a theft. If you lose the phrase and your device breaks, the funds are gone for good. The phrase is both your backup and your biggest point of failure.

How people store it

Common practice is to write the words by hand on paper or stamp them into metal plates, in the correct order, and keep the copy somewhere private and protected from fire and water. Many keep a second copy in another location. Some wallets support an optional passphrase, sometimes called a 25th word, which creates a different set of accounts; it adds protection but must also be backed up, or the funds behind it are lost.

Storing the phrase as a photo, in a cloud note, in email or in a password manager synced online exposes it to anyone who breaks into that account.

Scams around seed phrases

No legitimate wallet maker, exchange, support agent or app will ever ask for your seed phrase. Fake support accounts, phishing sites that imitate wallet apps, fake wallet update pop-ups and even pre-filled recovery cards in tampered hardware wallet packages are all designed to get it. Anyone asking for it is trying to steal from you.

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Frequently asked questions

What happens if I lose my seed phrase?

If your wallet device still works, move the funds to a new wallet with a new phrase immediately. If the device is also lost, the funds cannot be recovered.

Is a seed phrase the same as a private key?

Not quite. The seed phrase is a master secret from which many private keys are derived, so it controls all accounts in the wallet at once.

Should I use 12 or 24 words?

Both are considered secure against guessing when generated properly. What matters far more is that the phrase stays offline and private.

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All glossary terms · Educational reference only — not investment, legal, tax or financial advice.