Seed Phrase
Written by Ryan Watkins
Introduction
A seed phrase (also known as mnemonic phrase) is a randomized list of words representing numbers that can be used to generate and/or recover a cryptocurrency wallet. Underpinning many well designed cryptocurrency wallets, a seed phrase is important for two reasons. The first is that it (the number it represents) can be used as a master key from which one can generate all the key pairs used in the wallet, thus storing all your funds. The second is that it can be used to recover funds in the case of anything happening that could prevent you from accessing those funds (lost keys, crashed computer, etc.).
In Bitcoin, the words used in seed phrases are generated from the wordlist of the BIP39 standard which contains 2048 words. Most wallets generate seeds consisting of 12 or 24 words. The logic underpinning the use of 12 or 24 words can be explained in short as, the longer the seed phrase, the more secure your funds, as the number of word combinations becomes exponentially harder to crack.
To illustrate, a 12 word seed phrase encodes 2048^12 (2^132) possible numbers (More accurately, 2^128, due to some of the data in a BIP39 phrase not being random). Assuming sufficient randomness used to generate the seed phrase, the only way an adversary could access someone’s wallet and steal their funds would be to brute force through 2^128 possible word combinations (2^256 possible combinations with a 24 word seed phrase). This is thought to be infeasible with many arguing (and demonstrating) that it would take an eternity to brute force a seed phrase even with enormous amounts of computing power. The implication of this is that the security derived from these large numbers is so powerful that an individual could carry an arbitrary amount of value across any border, without anyone being able to stop them or even know that they were carrying that value in the first place, with just 12 words memorized in their head.
Suggested Reading
Bitcoin and Mnemonics: The Art of the Secret Phrase by Jamie Redman
Bitcoin Seed Security Analysis by Jameson Lopp
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