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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 Ethereum? 
  20. 20. What is a soft and hard fork?
  21. 21. Blockchain - examples of use
  22. 22. Is blockchain safe?
  23. 23. Smart Contracts - what are they?
  24. 24. Liquidity pools in the cryptocurrency market
  25. 25. What is cryptocurrency mining?
  26. 26. What is the mining difficulty?
  27. 27. Inflation and its effects on financial markets
  28. 28. What is compound interest, and how does it work?
  29. 29. Cryptocurrency wallet diversification
  30. 30. Blockchain and NFT games - how to make money on them?
  31. 31. Decentralized Apps – what are they?
  32. 32. What is Proof of Work (PoW) and what is Proof of Stake (PoS)?
  33. 33. What is the Proof of Authority (PoA) consensus mechanism?
  34. 34. What is Proof of Burn (PoB)?
  35. 35. What is CBDC - central bank digital money?
  36. 36. What is Cryptocurrency Airdrop all about?
  37. 37. What are the types of blockchain networks?
  38. 38. Key differences between ICO, IEO and STO
  39. 39. What is IoT - the Internet of Things?
  40. 40. What is the difference between Circulating Supply and Total Supply?
  41. 41. Everything you need to know about gas fees in Ethereum!
  42. 42. The most important cryptocurrency acronyms/slang you need to know!
  43. 43. Halving Bitcoin - what is it, and how does it affect the price?
  44. 44. What is the Fear and Greed index for cryptocurrencies?
  45. 45. APR versus APY: what is the difference?
  46. 46. Snapshot from the world of cryptocurrencies - what is it?
  47. 47. Know your customer (KYC) and Anti-money laundering (AML) what are they in the cryptocurrency industry?
  48. 48. What is a whitepaper? What is its purpose, and how do you write it?
  49. 49. How do you transfer cryptocurrencies?
  50. 50. What is EURT? How does it work?
  51. 51. What is Regenerative Finance (ReFi)?
  52. 52. Bitcoin Pizza Day
  53. 53. What Is Stagflation and Why Does It Have a Negative Impact on the Market?
  54. 54. What are decentralized DAO organizations, and how do they work? What are DAO tokens?
  55. 55. CyberPunks - the story of the most popular NFT collection in the crypto industry!
Lesson 16 of 55
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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 important 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 choose 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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