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Ask CryptoVantage: What Are Recovery Seed Phrases? Are They Universal?
If you are brand new to cryptocurrency you have likely heard about a recovery seed phrase for your crypto wallet.
These recovery seed phrases are the way in which you can gain access to your wallet again in the event that your device is lost, stolen, or you forget your password. But how do they work, how important is it to keep yours safe, and do they work across all crypto wallets? Those are the questions we are going to answer in this edition of Ask CryptoVantage.
How Do Seed Phrases Work?
Basically, a seed phrase is a 12 or 24-word sequence that is randomly generated when you create a wallet address. The library of words it chooses from is 2,048 simple words, and because the words have to be entered in sequence, creating a situation where it is almost impossible to guess someone else’s phrase or have two of the same sequence occur.
The seed phrase acts as an alternative to your private keys, as it is easier to remember and write down a lot of words than a huge string of letters and numbers. If you lose your device, forget your password, or have your device stolen, you can enter your seed phrase into a wallet compatible with that network, meaning you can enter an Ethereum seed phrase into MetaMask or My Ether Wallet in order to recover access to your funds. Even if you lose a hardware wallet like a Ledger Nano X, you can recover access to your funds by buying a new one and entering your recovery phrase.
How Important is it to Keep it Safe? What’s the Best Way?
Since your recovery seed phrase can be used anywhere to gain full access to your crypto funds, it is incredibly important to keep it safe. If someone steals the piece of paper, or card your phrase is written on, they have essentially stolen your real wallet, except that you cannot call to cancel your crypto.
As a result, the way in which you store your seed phrase has become incredibly important and is heavily debated in the crypto community. There are many different strategies: writing it down on a piece of paper and keeping it somewhere safe, writing a few words on multiple pieces and storing them in various locations, and things like metal cards with engravings of the words. In the end, whatever you are most comfortable with is best. Just keep make sure to keep your recovery seed phrase safe from loss (water, fire, etc.) or you may lose your funds.
Do Seed Phrases Work Universally Across All Crypto Wallets?
A seed phrase is specific to a blockchain, but not to the wallet itself. This means that if you started with the Binance Smart Chain Wallet browser extension you can take the seed phrase generated when you created that wallet and enter it into any other BSC compatible wallet, such as MetaMask, and gain access to the same account through two extensions. You can essentially switch between wallets if you think one has better features than another in this manner. But the main purpose of the phrase is to recover access if you lose your device or accidentally delete the extension or something to that extent.
However, you cannot take a Bitcoin recovery seed phrase, enter it into the Binance Smart Chain Wallet extension and gain access to your Bitcoin wallet, as it is a different blockchain. So, while they are interoperable between wallets that are the same network, they cannot be entered into any wallet.
