Understanding The Concept Of Seed Phrase
There are various terms and principles in the cryptocurrency industry, but self-sovereignty remains the basic principle. With this principle, the users are allowed to access their cryptocurrency without providing authentication or proving their identity.
Similarly, the users won't have to depend on banks or third-party financial institutions for storing the cryptocurrency safely. To illustrate, Ethereum and Bitcoin are designed to conduct everything as a blockchain as it helps secure and store the cryptocurrency through a peer-to-peer computer network.
If you are wondering how the blockchain will know about your cryptocurrency, it utilizes password-oriented codes,which are only accessible by the holders (these codes are generated through algorithms).
When a user sets up the crypto wallet, such as a software-based wallet of bitcoin mining or a hardware wallet, it will generate a combination of simple words, which is commonly known as a seed phrase. In addition, the wallets tend to use the seed for creating private keys, which allows the users to spend and send the crypto coins.
It wouldn't be wrong to say that a wallet is the password manager for cryptocurrency while the seed phrase remains the master password.
To illustrate, a seed phrase is designed as a string of over 24 words to create the key for a cryptocurrency (the words start from 12).
Now, you must be wondering why it's a combination of the word rather than numerical values it is because the numbers can be challenging to memorize, and it can even lead to incorrect transcribing. All in all, the seed phrase is meant to unlock the wallet as well as the private keys associated with the cryptocurrency in your wallet.
In simpler words, the seed phrase is defined as a string of words that's generated by the cryptocurrency wallet, so you can access the coins. Having said that, when you have access to the seed phrase, you will be able to access the cryptocurrency associated with the connected wallet, and it remains the same even if you lose or delete the wallet.
However, since it's private information, you need to keep proper track of it to ensure you always have access to your cryptocurrency (yes, if someone has your seed phrase, they will be able to access your cryptocurrency).
On the other hand, if you end up losing or deleting the wallet without saving the seed phrase, you will eventually lose access to the cryptocurrency investment.
The Process Of Seed Phrase Functionality
Whenever you create the cryptocurrency wallet, the seed phrase will be automatically generated and is defined as the representation of random number strings, and the wallet utilizes it for generating the private keys that will allow you to spend and send the cryptocurrency.
As far as the availability of human-based seed phrases is concerned, it's because humans are better at interacting and remembering the word series but make sure not to depend on your memory, so save it somewhere secure.
As far as formulation of seed phrase is concerned, it is pulled from around 2,048 words, and it was actually adopted after the Improvement Proposal 39 of the 2013 Bitcoin, which actually developed a standard for deterministic wallets, where the seed phrase will control the private keys that are stored in the wallet.
Moreover, this standard resulted in the inter-compatibility of the wallets, with which the users could switch wallets by entering the seed phrase into a new wallet, and the cryptocurrency will be accessible.
On the other hand, if you are concerned about deleting and losing the wallet, you will be able to recreate the wallet with the help of a seed phrase. For this reason, you must memorize your seed phrase and store it securely from phishing attacks, hackers, and loss.
Ensuring Safe Storage Of Seed Phrase
When it comes down to storing the seed phrase, it depends on how much cryptocurrency you hold and how much security and convenience you need.
To begin with, the best way of securing the seed phrase is splitting it between different safe deposit boxes, and these boxes need to be positioned in different locations, but it's not convenient. For this reason, you can opt for specialized services for engraving the seed phrases into some stainless steel plate. Not to forget, you can always write it down in your safe diary.
Conclusion
The seed phrase is the ultimate option for people who need to keep their cryptocurrency secure and to have secure access to the wallet. So, are you in favor of the seed phrase or private key?