Bitcoin Backup: How Recovery Seeds Work

The seed phrase, also known as the recovery phrase, is the golden key to digital wealth. Anyone who decides to keep Bitcoin and Co. themselves should think about the long-term security of the words.

But how does such a seed actually work?

The starting sentence consists of 12 or 24 words

In short, the seed is a well-defined but randomly generated list of words that contains all the information you need to recover your wallet in case of loss. And that’s how it should be treated. Because anyone who gets their hands on the twelve or 24 words accesses your BTC – and if in doubt can steal it.

Usually the seed sentence consists of 12 or 24 words. These in turn represent a very specific number in the Bitcoin source code, which in the unique combination in each case is the source of all key pairs for the respective wallet. So you can think of your bitcoin wallet as a sort of password manager with the master password as the seed phrase.

Anyone who writes off the private key is living dangerously

Of course, there are very practical reasons to use words and not numbers when programming the seed. You can also write the public and private key and derive the wallet from it. However, the private key results from a hexadecimal sequence of numbers whose 64 digits offer numerous possibilities of erroneous copying. If you miswrite a single digit of the private key, the coins are lost forever if you lose the wallet.

Seeds of recovery for long-term storage of your Bitcoin have prevailed in all well-known hardware wallets due to the mentioned advantages. In our review section you can find our extensive comparison of wallets like Ledger Nano, Bitbox and Trezor.

Seed should be stored in a safe place

The location of the Salvage Seed(s) should be chosen carefully. After all, losing the seed with a simultaneous compromise of the wallet leads to the inevitable loss of the digital asset. Basically, never save your words digitally. Even printing it carries the risk of being compromised. Instead, write your recovery seed on a piece of paper, or better yet, immediately stamp it on metal.

Storing your bitcoin is simple, but not easy. With the right hardware wallet, you take a big step towards safe custody.