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  1. 1. What are these cryptocurrencies?
  2. 2. Bitcoin - the story of a technological revolution
  3. 3. Satoshi Nakamoto, who is the creator of Bitcoin?
  4. 4. Vitaly Buterin – the creator of Ethereum
  5. 5. What is blockchain, and how does it work?
  6. 6. What is an NFT token?
  7. 7. What is money?
  8. 8. Cryptocurrencies vs fiat money, which will win?
  9. 9. What is DeFi (Decentralized Finance)?
  10. 10. DeFi: opportunities, advantages and disadvantages of decentralized finance
  11. 11. What is an altcoin?
  12. 12. Stablecoins - What are they?
  13. 13. Cryptocurrency wallet - what is it?
  14. 14. Why do we talk about bull and bear markets?
  15. 15. Security in the crypto market - what rules are worth following?
  16. 16. What is the seed phrase in cryptocurrencies?
  17. 17. Dogecoin and memecoin - what are they?
  18. 18. What is a Ponzi scheme?
  19. 19. What is a Soft and Hard Fork?
  20. 20. Blockchain - examples of use
  21. 21. Is blockchain safe?
  22. 22. What are the types of blockchain networks?
  23. 23. What is blockchain network congestion, and how does it work?
  24. 24. Cryptocurrency wallets: Hot Wallet vs. Cold Wallet - key differences!
  25. 25. Cryptocurrency wallet diversification
  26. 26. Halving Bitcoin - what is it, and how does it affect the price?
  27. 27. Blockchain versus databases: key differences!
  28. 28. How do you transfer cryptocurrencies?
  29. 29. The most important cryptocurrency acronyms/slang you need to know!
  30. 30. The memecoin story: madness or great investment?
  31. 31. What is Ethereum? 
  32. 32. Everything you need to know about gas fees in Ethereum!
  33. 33. Gavin Wood: Blockchain Visionary and Co-Founder of Ethereum
  34. 34. Decentralized Apps – what are they?
  35. 35. What is Proof of Work (PoW) and what is Proof of Stake (PoS)?
  36. 36. What is the Proof of Authority (PoA) consensus mechanism?
  37. 37. What is Proof of Burn (PoB)?
  38. 38. What is a whitepaper? What is its purpose, and how do you write it?
  39. 39. Smart Contracts - what are they?
  40. 40. Know your customer (KYC) and Anti-money laundering (AML) what are they in the cryptocurrency industry?
  41. 41. Blockchain and NFT games - how to make money on them?
  42. 42. Liquidity in the cryptocurrency market
  43. 43. Inflation and its effects on financial markets
  44. 44. What is stagflation and why does it have a negative impact on the market?
  45. 45. What are utility tokens and what use do they have in the cryptocurrency sector?
  46. 46. What is cryptocurrency mining?
  47. 47. What is the mining difficulty?
  48. 48. What is compound interest, and how does it work?
  49. 49. What Are Privacy Coins and Are They Legal?
  50. 50. What is CBDC - central bank digital money?
  51. 51. What is Cryptocurrency Airdrop all about?
  52. 52. Key differences between ICO, IEO and STO
  53. 53. What are decentralized DAO organizations, and how do they work? What are DAO tokens?
  54. 54. What is EURT? How does it work?
  55. 55. What is the difference between Circulating Supply and Total Supply?
  56. 56. Snapshot from the world of cryptocurrencies - what is it?
  57. 57. What is the Fear and Greed index for cryptocurrencies?
  58. 58. APR versus APY: what is the difference?
  59. 59. What is an Initial Farming Offer (IFO)?
  60. 60. What is Regenerative Finance (ReFi)?
  61. 61. Who Is Craig Wright, the Alleged Creator of Bitcoin?
  62. 62. What Is Bitcoin (BTC.D) Dominance?
  63. 63. Michael Saylor, Self-Proclaimed Bitcoin Maximalist
  64. 64. Bitcoin Pizza Day
  65. 65. AI blockchain - a new look into the future?
  66. 66. What is WorldCoin? Everything you need to know about this cryptocurrency!
  67. 67. Azuki NFT collection guide: everything you need to know about it!
  68. 68. The 10 most expensive non-fungible tokens (NFTs) ever!
  69. 69. The Bored Ape Yacht Club (BAYC) - the story of the popular NFT collection!
  70. 70. CyberPunks - the story of the most popular NFT collection in the crypto industry!
  71. 71. NFT Art: The digital art revolution - history and examples!
  72. 72. Who is Changpeng Zhao, CEO of Binance?
  73. 73. Who is Brian Armstrong - CEO of Coinbase?
  74. 74. Who is Galy Gensler and the SEC? How does the Securities and Exchange Commission (SEC) affect the cryptocurrency market?
  75. 75. Web3's most popular social media platforms! Will they replace the platforms we know?
  76. 76. What is IoT - the Internet of Things?
  77. 77. On-chain analysis in the cryptocurrency world: Everything you need to know about It
  78. 78. Can you pass on your cryptocurrencies after death? How do you pass on a cryptocurrency inheritance?
  79. 79. What is the Howey test? What application does it have in cryptocurrencies?
  80. 80. The use of blockchain technology in the world of sport
Lesson 16 of 80
In Progress

16. What is the seed phrase in cryptocurrencies?

A seed phrase, otherwise known as a recovery phrase, mnemonic phrase or recovery phrase. It consists of 12–24 words that effectively protect our cryptocurrency hardware wallet.  The seed phrase protects and secures our digital assets. Have you wondered what exactly it is and how it works? In today’s lesson, we will answer your questions. 

The seed phrase – an explanation 

To begin with, remember one very important thing. The seed phrase is not your private key. In the simplest terms, it is a string of 12–24 words that you receive when you set up a hardware cryptocurrency wallet. When you install your new wallet, on your phone or computer, you are told to securely save the string of words displayed. These are essential for recovering the wallet we have generated in case it is lost, or the password is lost. This is why it is so significant to write them down and store them in a safe place that is inaccessible to third parties. The recovery phrase is assigned to the wallet you are using, not to a specific cryptocurrency. Ideally, you should make yourself several copies of the phrase and store it in several secure locations, such as a safe. Make sure you know where you are keeping it.  Otherwise, it could have terrible consequences for you. 

Seed – how it works 

As we have already mentioned, these are word phrases. Usually, a string of 12-24, the system selects them at random from a pool of 2048 English words. Each word represents a number, which is then converted into your private key. Cryptocurrency wallets are based on three standards: BIP32, BIP39 and BIP44. It is BIP39 and BIP44 that are responsible for generating the list of words that we need to save. These standards are also responsible for converting the generated phrases into a 512-bit SEED. The result is a portfolio with a BIP32  (Hierarchical Deterministic – HD) standard. So, you already know how most hardware wallets work, in which we store all our cryptocurrencies

Each word, generated, consists of a minimum of three characters. Advanced mathematical functions are responsible for everything, of course. We can recognise the words in our pool by just the first four characters. But it is always the fifth that will be the special one. This is why we usually write down the first four characters. We simply don’t need the next four. How do you secure your seed? 

∙ If you do not share your phrase with third parties, it is almost impossible to guess it. Nevertheless, consider all the risk factors you may encounter along the way. After all, there is a likelihood that hackers could gain access to your computer and steal your phrase if you store it in a file on your desktop, for example. Here are some tips to help you feel safe: 

∙ Do not – under any circumstances – share your seed and private key with third parties. 

∙ Generate the recovery phrase completely offline. 

∙ Once you have the string of words, it is best to write it down on a piece of paper or  metal plates that you can buy from special shops. 

∙ If you use a wallet connected to the Internet, purchase a good antivirus and use 2FA.

∙ Even though you only need the first four characters to retrieve your wallet, write the whole thing down anyway. Remember the correct order. 

∙ If you have used a piece of paper for this, copy it and preferably store it in a safe or lock box. 

∙ It is a good idea to save the seed as a copy of a portable memory stick, e.g. on a pen drive. Of course, do this when it is not connected to the network. As an option, use aeroplane mode. 

∙ Never, ever save the seed to an online file, e.g. Google Docs.

∙ The same on your phone or in a file on your computer. Even if the folder you put the  phrase in is password protected, hackers can still manage it. 

∙ Don’t take a screenshot of your phrase or save it in your password manager. ∙

∙ You can use the Shamir algorithm. It allows your seed to be broken down into multiple parts. As a result, the individual pieces are useless. They also do not reveal any information. 

∙ Hidden wallets, so-called passphrase. This is one of the features of hardware wallets.  With it, you as a user create an unlimited number of hidden wallets. You leave yourself “change” on one and invest larger amounts of your cryptocurrencies on the others. 

∙ You can use stainless-steel tiles or a set of steel tiles. 

The above tips will certainly allow you to choose the best option for you. We, from experience, recommend a simple piece of paper that you will keep safe. 


You already know exactly what seed phrase is. How it works and what it is based on. It is crucial to keep it as safe as possible when storing it. We have provided you with many tips from which you will decide the best one for you. Enjoy your adventure with hardware wallets!  If something is unclear to you, please visit our other lessons, where you will find the answers to your questions. 

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