What Is a Bitcoin Recovery Phrase?

Thanks to Bitcoin’s robust blockchain, you can rest assured that your BTC is stored safely on chain. Even if you lose your wallet, a simple recovery phrase is all that’s required to restore the connection to your digital coins.

Securing this seed phrase is a critical part of owning Bitcoin.

How Bitcoin Wallets are Secured

Bitcoin enables its users to be their own bank, but with this self-sovereignty comes great responsibility, especially when it comes to securing one’s wallet.

Creating a new Bitcoin wallet generates a public address to receive funds, but it also generates a private key. This long alphanumeric code is required to sign transactions and is managed for you by the wallet software. You may have a fingerprint scanner on your phone, or a pin code on your laptop to gain access to the wallet, but the transaction itself is signed on the blockchain using the private key.

The handy thing with Bitcoin is that the value remains stored on chain, not in the wallet. This means that should you ever lose the device with the wallet software, all you need to do is install a new wallet on a different device, enter your private key and you’ll immediately gain access to your funds again. It’s like signing into your email with another computer, only there’s no customer service to reset your password. This is why it’s incredibly important to secure your private key.

The Only Words You Need to Know

Using private keys to recover wallets was the way to go until BIP39 came along, which stands for Bitcoin Improvement Proposal #39. BIP39 gave users a much simpler way to regain access to their wallets, using simple legible words instead of long strings of jumbled letters and numbers.

Open a new wallet today and you’ll likely be asked to write down a 12 or 24 word seed phrase, or recovery phrase. This seed phrase is not the same as the private key, nor does it replace it, as private keys remain necessary to sign your cryptographic blockchain transactions. Instead, a Bitcoin recovery phrase provides you with a more user friendly way to reactivate your wallet from a new device.

It’s important to note that the seed phrase is specific to the blockchain and not to the wallet manufacturer. This means that if your provider shuts down their operations and your device dies shortly after, you’re not locked out of your coins. All you need to do is get yourself another wallet and import the phrase. This is the “recovery” part of the process.

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Seed Phrase Security

This simplicity also makes it incredibly easy for a bad actor to remotely drain the contents of your wallet should they ever gain access to your seed phrase, so make sure to keep this safe. Never keep your Bitcoin recovery phrase stored digitally, especially not in your emails or in cloud storage. Keep a physical copy instead. Pen and paper is a good place to start but as your holdings begin to grow, you could consider more permanent solutions, such as etching the words onto stainless steel.

Some people take their security very seriously and choose to eliminate single points of failure by cutting their seed phrase into smaller sections and storing these in different physical locations.

Finally, under no circumstance should you ever tell your Bitcoin recovery phrase to anyone else. If someone contacts you in the name of a wallet provider or crypto exchange and asks for your seed phrase, you can bet your last satoshi you have a scammer after your coins.

Can a Seed Phrase Be Guessed?

Theoretically, yes; anything can be guessed given enough attempts. When it comes to a Bitcoin recovery phrase though, the chances of this happening are beyond miniscule.

BIP39 generates each phrase from a standardized list of 2048 words. While a seed phrase may appear common enough upon reading its words, arriving at this unique combination involves some incredible calculations. Taking a 24 word seed phrase as an example, each unique combination of words offers a single variation from a total of 2048^24 possibilities. This returns a number of combinations so large, its size is comparable to the total amount of atoms in the known universe.

No computer today can crunch these kind of numbers, and if they did, they’d surely have higher value targets to hack than the Bitcoin blockchain.

Final Word

As you progress on your journey and battle through the Bitcoin jargon, you’ll add more and more words to your lexicon. None shall be as important as the words in your seed phrase. Make sure to keep these secure!