The blockchain stores data about the state of addresses and about transactions, while a wallet gives the user the tools to manage assets. In non-custodial wallets, access is usually restored with a seed phrase — a sequence of words from which the necessary keys can be recovered.
In this article we will explain what is a seed phrase, how it is created and what it consists of. We will also look at how to regain access to a wallet with cryptocurrency and what to do if a user has forgotten the password to a wallet that holds a balance.
What is a seed phrase
A seed phrase is a secret combination of words that is used to access digital assets. It is also called a mnemonic phrase. The list of words is generated when a new address is created on the blockchain. Crypto wallets are used for this. The mnemonic phrase is generated from random entropy and consists of 12, 15, 18, 21 or 24 words. BIP-39 uses special word lists, including the English wordlist of 2048 words.
For example, a phrase may look like this:
river stone apple sunset forest mirror cloud pencil ocean window tiger lemon
In rare cases this mnemonic may consist of 15, 18 or 21 words.
Every word is linked to the cryptographic data of the wallet. At the same time, cryptocurrencies are not stored inside the application. The funds are on the blockchain, and the crypto seed phrase only helps you get access to manage them. That is the whole seed phrase meaning: the words are a human-readable form of the data that proves ownership of an address. This is also the short answer for beginners who search for whats a seed phrase before they create their first wallet.
It is also important to understand that different services may use their own mechanisms for recovery and access protection.
For example, a user can create a phrase and a private key for emergency situations. This model is implemented in the popular Crypto Office service in Telegram. In it, the user creates a secret phrase together with a private key, which will be needed if access to the Telegram account is lost. This gives the user an additional way to regain control over their funds.
How to restore a wallet with a seed phrase
Imagine the situation: a user created a crypto wallet, and some time later the phone was lost together with the application installed on the device.
The usual login to the account is no longer available, but the cryptocurrency does not disappear. The funds are still on the blockchain. The user only needs to restore access to the data that allows them to manage those funds.
To do this, install the crypto wallet on a new device, choose the “Restore wallet” option and enter the seed phrase.
It is important to keep the correct order of the words. After the mnemonic phrase is entered, the wallet uses it to restore the required cryptographic data. The application then finds the linked addresses on the blockchain and shows the user’s balance. This is the standard seed phrase crypto recovery flow in most non-custodial wallets.
In practice, the seed phrase does not move funds to the new phone. It proves the right to manage the wallet. That is the practical side of what is seed phrase recovery. After restoring access, the user can again send, receive and swap cryptocurrency.
Restoring access to a wallet in Telegram: PIN, email, 2FA
The Crypto Office service provides several ways to protect funds. A user can additionally set up:
- a PIN code;
- 2FA;
a personal email and biometrics, including FaceID.
They help confirm the user’s right to manage the cryptocurrencies in the wallet. These options also reduce the risk of unauthorized access. For emergency cases, a secret phrase and a private key are used.
The secret phrase and how to regain access with it
The seed phrase in Crypto Office differs from the traditional one. It takes the form of a secret phrase made up of three words. It is needed to move funds to a new wallet. To do this, go to the security settings and then follow these steps:
Select “Secret phrase and key”.
- Tap “Set secret phrase and key”.
Set an answer to the security question and tap “Continue”.
Confirm the creation of the phrase and the key.
Save the secret phrase and the key in a safe place.
This way the user has a backup method for withdrawing cryptocurrencies to another wallet. To use this option, you need to enter the key and the phrase on a dedicated website: https://restore.crypto-office.com/.
Transferring your profile to another Telegram account
Losing or changing an old Telegram account does not always mean losing access to your funds. The Crypto Office developers have rolled out an option that makes it possible to transfer the profile and all current settings to a new account.
To do this you need to:
Go to the “Security” section.
Select “Account transfer”.
- Go to the “Recovery” account transfer website and enter the phrase and the key.
- Copy the code from /restore:... that will be issued.
- Launch Crypto Office in the new Telegram account.
- Send the received /restore code to the bot chat.
- Confirm the account transfer.
Note that in order to transfer a Crypto Office profile you must first protect the wallet with a PIN code. In addition, at least three days must have passed since the secret phrase and the key were created.
Where to find and how to store the secret phrase
The secret phrase must be created in advance in the Crypto Office security settings. The same section contains the other wallet protection tools. Among them are 2FA, a PIN code, biometrics and a personal email.
After it is created, the phrase has to be saved by the user. You should not send it to yourself in Saved Messages, nor pass it to third parties. Anyone who obtains your crypto seed phrase can potentially restore the wallet and take control of the funds.
If you are wondering where to store seed phrase backups, the simplest option is to write the phrase down on paper and put it in a place that only the wallet owner can reach. For extra protection you can make several physical copies and keep them separately. A mnemonic phrase can also be stored on metal media. With this storage method the words are punched with a center punch or stamped with letter stamps onto a plate.
You should not take a screenshot of the secret phrase unless it is really necessary. The photo may end up in cloud storage or become available to another person if the device is hacked.
What to do if you have forgotten your seed phrase
In a non-custodial wallet, losing your seed phrase can lead to the irreversible loss of access to funds if no other recovery mechanism is provided.
The management model implemented in Crypto Office allows access to funds through a PIN code or biometrics. And if the user has lost or forgotten the seed phrase, access to the wallet can still be restored via email.
When recovery by seed phrase is no longer possible
If some of the words are lost or written down incorrectly, recovery may become impossible. The same applies to the wrong word order, because the recovery words must match the original exactly.
When only part of the words is missing, the phrase can sometimes be reconstructed if its standard is known. But brute-forcing the options through online services is dangerous.
If the seed phrase is lost together with access to the wallet interface, regaining control is usually impossible. The first thing to do is to find the original written copy of the phrase.
What to do if the seed phrase does not work
If the wallet does not accept the seed phrase, it does not mean the funds are lost. First check the phrase itself and the recovery method.
Start by counting the words again. For the standard BIP-39 this is usually 12 or 24 words. Then check every single word.
It must be spelled correctly and match the wordlist of the standard that the wallet used. Problems appear especially often because of similar-looking words and typos made when writing the phrase down.
After that, check the order. It is also important to make sure that you are using exactly the phrase that was created for your wallet. One person may have several crypto wallets. A randomly chosen recovery phrase may open access to a completely different wallet address.
Never enter your seed phrase on random websites, in unknown Telegram bots or in unfamiliar applications. The mnemonic phrase gives access to the wallet, so an attempt to “check” it through a questionable service may end with the loss of your cryptocurrency.
Conclusion
A mnemonic phrase is a key element of crypto wallet security. It allows you to restore access to the funds on the blockchain. At the same time, the way it works depends on the specific service. That is why it is important to understand how it is built and what data is needed to access the funds. It is equally important to store and use the seed phrase correctly. Do not keep the words in the cloud, do not send them to other people and do not enter the phrase on unverified websites or services.
Michael Turner knows his stuff when it comes to crypto and blockchain. He puts out content that's not only well-researched but also easy to understand, helping people get a handle on managing their digital assets.