A seed phrase is a randomly generated cryptographic combination of words that serve as a form password that allows private keys to your cryptocurrency wallet to be created. This seed phrase , sometimes also referred to as a ‘recovery phrase’ or ‘mnemonic phrase’ is the key that allows you to unlock access to your stored cryptocurrency. This phrase can vary in length and is sequentially randomized but must be input in a specific order.
The size of this phrase can vary from 12-24 words in length and serves as a means for the Blockchain to identify which cryptocurrency you possess. The seed phrase uses relatively simple words that are a representation of a very complex series of numbers. The use of a simple sequence of words is to account for the human error potential when writing down your seed phrase.
Through this seed phrase your cryptocurrency ‘wallet’ can generate a series of ‘private keys’ that allow for the trade and sale of your cryptocurrency. In this way, your wallet manages the security of your private keys and the seed phrase generates the security in your wallet.
There are many different types of cryptocurrency wallet, some will only hold one type of coin, while others offer a wide selection of cryptocurrencies. But with the use of seed phrase, a user can ‘swap’ to a different wallet, without losing any of the stored currency within. It allows for third-party access, as well wallet recovery if an individual was to lose access to that specific wallet for some reason. Even with all of these impressive features, there are some very important security risks to keep in mind.