What Is a Recovery Phrase?

BeginnerJan 12, 2023
Enabling easy access to your digital assets
What Is a Recovery Phrase?

It has been established that Cryptocurrency Wallets are a haven for storing and managing digital assets such as cryptocurrencies, ICO tokens, and NFTs, among others. As such, there’s a need to safeguard them with codes or words known only to the user or to anyone he chooses to disclose the phrase to.

This article seeks to explain what a Recovery Phrase is, why every Crypto Wallet has a unique recovery phrase, how it works, and how to protect it.

What Are Cryptocurrency Wallets?

Cryptocurrency wallets are safe vault that holds the private and public keys of all Cryptocurrencies (Bitcoins and Altcoins), Initial Coin Offering (ICO) tokens, Security Token Offerings (STOs), Tokenized stocks, NFTs, and other digital assets in one place.

They do not hold any fiat or physical currencies rather they are software applications that hold the unique address of users’ digital currency.

In addition, Crypto wallets allow you to easily interface with various blockchains and enable you to perform several transactions. There are two types; Custodial and Non-custodial wallets. The former is held and protected by a third party while the latter is controlled and secured by the user.

Therefore, to ensure the security of crypto wallets, a set of codes or words (phrase) are given to prevent losing access to your crypto assets in the event of loss, damage, theft, or even a natural disaster. Let’s look at what a ‘Recovery Phrase’ is.

What Is a Recovery Phrase?

The Recovery Phase, otherwise known as the ‘Seed Phrase’ is the only backup for all crypto wallets, managed through devices, and can be used to restore access to cryptocurrency or blockchain wallets; that’s, the recovery phrase is a set of words coined by Crypto Wallets that give the user access to their cryptocurrency or other digital assets associated with that wallet.

Also, it is simply a randomly generated series of words when entered in the right order allows the user to recover their private key thereby unlocking their crypto wallet.

However, the recovery phrase has several terms which are used interchangeably to refer to the same thing, such as; “Seed Phrase”, “Backup Phrase”, “Mnemonic Phrase”, “BIP39 Recovery Seed”, and so on.

“Backup Phrase” emphasizes why these words are important, while “Mnemonic Phrase” shows that these are real words rather than a set of unusual characters.

Nevertheless, these terms are different ways to say the same thing regardless of what you call it, Seed Phrase or Recovery Seed, or Mnemonic Phrase will usually look the same.

Let’s now discuss why wallets utilize the recovery phrase.

Why Do Wallets Use Recovery Phrases?

Most people have very poor password ideas and structuring and usually use very simple passwords (e.g. 12345 or PASS, date of birth, etc), they even go as far as using the same pattern of passwords across all Apps on their devices. This puts them at great risk because once one of their passwords has been cracked, it’s very easy for hackers to access all of the other apps on their devices and make away with their digital assets.

Thus, to thwart the possibility of experiencing loss of valuable assets, crypto wallets randomly generate unique recovery seed phrases for users, to be used when carrying out certain transactions or in the case of loss, damage, or theft of your device.

Furthermore, it would be very difficult to access your crypto wallet if by chance you lose the “Recovery Seed Phrase,” unlike ‘Normal Passwords,’ which can be reset at any time because they are secured in the retrieval system Recovery Phrases, on the other hand, can’t be reset nor retrieved as they are not stored in any retrieval system or server.

This means if you lose the recovery phrase that was given upon creating the wallet, that’s for a Non-custodial wallet, you are locked out forever, meaning that all assets (cryptocurrency, tokens, STOs, NFTs, etc) stored therein will be lost forever and can’t be recovered.

This is because the company that makes the wallet cannot recover the phrase as there is technically no way for them to, because they can not see nor store your recovery phrase on their servers.

Moreover, Custodial wallets offer more protection as ards retrieve the information on your wallet.

How Does a Recovery Phrase Work?

As stated above the Recovery Phrase is a random series of words that when entered properly recover access to crypto wallets. All recovery phrases are unique and they may consist of either 12 or 24 words.

They can be given in this format:

work upon reel pent
knife asset theme pant
fund toss feet chat

The user will be required to fix these words accordingly in the boxes provided. By doing so, access will automatically be granted.

How to Safeguard your Recovery Phrase

It is advisable that when creating a new wallet, the user should store/write the recovery phrases in a safe place to be able to get them when the need arises.

There is no perfect method for storing your crypto seed phrase securely, but the following should help you with the way your seed phrases could be stored, they include:

  • Encrypting your wallets and storing your recovery phrase inside an encrypted folder fully protects your wallets from malicious attacks like Ransomware, Phishing Scams, etc.

  • Writing the Seed Phrase on a piece of paper or book and hiding them in a vault, permanently fixed in the wall guarantees in a way the security of the phrase.

  • Flash Drive or USB stick can serve as a good place to store your recovery phrase.

  • Steel plates allow you to physically store your seed phrase, or split seed phrases, easily and securely. Steel plates are chosen because of their durability and capacity to hide vital information. Some notable steel plates and capsules include Ledger’s Cryptosteel capsule and Billfodl steel plate. Trezor

Your recovery phrases should be well safeguarded and can be accessed easily.


In recent times, fraudulent activities in the crypto space have caused a lot of losses to investors and traders who store their assets in crypto wallets. The reasons could sometimes be a result of loss, theft, or damage to electronic devices. Hence, the need for a Recovery Phrase.

Recovery Phrases grant users access to their wallets when using a new device and enable them to claim their assets. Also, it is pertinent to note that while these phrases are generated by wallet apps, it is non-recoverable as users will be permanently denied access to the wallet; hence, the need to diligently safeguard those phrases to avoid losing your funds or digital assets.

Author: Paul
Translator: Binyu
Reviewer(s): Matheus, Ashley, Joyce
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