How a seed phrase works
The usual format comes from the Bitcoin standard BIP-39. The wallet generates 128 to 256 bits of randomness, adds a checksum, and cuts the result into groups of 11 bits, each of which selects one word from a list of 2,048.
That gives 12 words for 128 bits and 24 words for 256 bits. The checksum lets a wallet reject most mistyped phrases.
The words are then turned into a 512-bit seed with the PBKDF2 function, and an HD wallet derives its tree of keys from that seed. An optional passphrase is mixed in at this step: the same words with a different passphrase open a different wallet.
Why seed phrases matter to a wallet product
The phrase is the backup and the single point of failure at once. It restores the wallet on any compatible device, and a photo, a cloud note or a phishing page that captures it gives a thief everything.
A request for a seed phrase from a support agent or a website is a known fraud pattern, since no genuine wallet service has a use for one.
Products for mainstream users therefore try to remove the phrase. Embedded wallets replace it with key shares, passkeys or encrypted backups, and custodial services hold the keys themselves.
Seed phrase, private key or passphrase?
- Private key
- Controls one address. The seed phrase is the source of all of a wallet's private keys.
- Passphrase
- An extra secret added to the words under BIP-39. Forgetting it locks the wallet as surely as losing the phrase.
- Password or PIN
- Unlocks the app on one device. It can be changed, and it does not restore the wallet elsewhere.
Where a seed phrase shows up in a platform
Modules that do the work
- Custody & walletsWallets on every major chain, with MPC custody from leading providers or your own keys.
- AuthenticationSign-in, passkeys and second factors for customers and staff, on your identity provider or ours.
Platforms that need it
Where it is written
The laws and standards this page's facts come from.
General information, not legal advice: what applies to you depends on your services and your market.