What is a Seed Phrase - BIP39 Standard Simply Explained

--- by D. Petkovski ---

Understanding seed phrases is essential for protection of your digital assets.

I already covered best practices of seed phrase protection and today I’ll explain exactly what we’re protecting.

Table of Contents

Private Keys vs Seed Phrase

The ownership of a crypto wallet boils down to having the private keys that control it.

A private key is a string of alphanumeric characters that allow users to access and use the funds protected by it.

With increasing adoption and the cryptocurrency space as a whole becoming more user friendly, today, beginners don’t need to worry about the technical details behind private/public keys or how to use them.

This is all abstracted away by using a seed phrase – a sequence of English words, usually 12 or 24, which can be used to regenerate your private key.

This way, by knowing these words, you can always access the funds in your address.

Even if you lose your phone, delete the wallet, or need to use a different software. As long as you have your seed phrase, you can initialize your wallet on any BIP39 compatible app/software.

BIP39 Standard Explained

BIP39 is a standardized method for generating seed phrases.

The seed phrase consists of a series of words from a predetermined list of 2,048 words.

This might sound unsafe to the human mind, which is not used to thinking in “big numbers”, so it’s worth noting that, given 24 word seed phrases, there are around 2048^24 possible combinations. This equals 29 quinvigintillion, or 2.96 * 10^79. For reference, this is comparable to the approximate number of atoms in the observable universe (source).

In other words: it’s practically impossible to randomly guess someone’s seed phrase or find a funded wallet by chance.

BIP39 also supports passphrases, which is an additional string of characters that unlocks a completely separate set of addresses when used besides a 12 or 24 word seed phrase.

This standardized system has become widely adopted in the cryptocurrency industry, offering a secure and user-friendly way to manage private keys. And indeed, having a consistent process of generating and using seed phrases improves the user-friendliness through standardization – a user doesn’t need to jump through hoops each time they use a different blockchain/software/wallet.

BIP39 in Action

Today, almost all reputable Bitcoin and cryptocurrency wallets adopt the BIP39 standard.

This means that as long as you have your words, you can access your funds using any software wallet you want.

Imagine the following scenarios:

You hold your $BTC on a wallet on your laptop. Someone breaks into your home and steals it. You input your seed phrase in another device and your Bitcoin is there.
Your hardware wallet malfunctions and doesn’t turn on anymore. You buy a new hardware wallet from another company, initialize it with your seed phrase, and you have access to your money.
You hold assets on your phone and you’re fleeing a war. All your belongings are seized when you cross the border. But you remembered your 12 words – you get a new phone once safe and initialize a new wallet with them. Your funds are accessible wherever you are.

I can go on and on, but the point is that your assets are not “in” your (hardware) wallet.

Your assets are on the respective blockchain. And as long as you have the private key, or the seed phrase, you can access them from anywhere, using any software that allows you to.

BIP39 is the way that this is standardized, making portability seamless and straight forward.

Author

D. Petkovski

📓 The Author Husband & Father
Software Engineer StrengthCentric
Bitcoin Hodler DeFi Veteran
🌍 Everything Enthusiast 🔥 Optimist

Revolutionizing ideas. Simplifying complexity. Sharing knowledge.