Ultimate Guide to Seed Phrases: Creation, Storage, and Usage

As with any emerging technology, the early days of crypto were fraught with challenges. Those who could wrap their heads around the concept of digital money faced another challenge: figuring out the wallets and transactions.

With no bank or central authority in charge, users had to rely on private keys: a long string of random characters, sprawling 64 letters across. This indecipherable combo of characters was the only proof of a wallet's ownership.

Needless to say, memorizing a private key was out of the question. People would note the key in a random file, take a screenshot, or even scribble it on paper. What made matters worse was the need for a separate private key for each crypto address.

Given the impracticality of that situation, the community quickly came up with a novel solution.

• Length: Consists of 12, 15, 18, 21, or 24 words, depending on the wallet
• Capitalization: All words are case insensitive, i.e., “treat” and “TREAT” are identical
• Unique Letters: Every word contains a unique set of first four letters. For example, a seed phrase with "combine" will never contain "combing"
• Order: The order of words is critical. The phrase "about, abandon" is not the same as "abandon, about"
• Example: "trick, couch, royal, guilt, wild, window, bridge, north, census, tower, amateur, treat"

For starters, seed phrases are mnemonic words that are easier to read and remember than a private key. So much so that it’s given rise to the trend of brain wallets—crypto vaults whose seed phrase is stored securely within the owner’s mind through memorization.

What truly makes seed phrases a noteworthy development is their ability to safeguard countless private keys under a single phrase. Doing so makes the management of multiple addresses significantly more convenient. More important, however, is the protection offered against a large variety of risk vectors.

While not common, software and digital file corruption is a real possibility. Hardware failures and misplacements are another common source of lost crypto fortunes. Vendor failures represent another risk vector.

In each of those cases, a seed phrase offers the ability to recover every single address associated with it.

A seed phrase is only as secure as its creation and storage methods. While most wallet applications let users create and store seed phrases on their personal devices, it would be a mistake to do so.

According to TRM Labs, a blockchain security intelligence company, hackers stole a staggering $1.38 billion in the first half of 2024—double the figure for the same period in 2023. Unsurprisingly, seed phrase compromises were reported as a “top attack vector”. Needless to say, securing seed phrases has never been more important.

Secure management of seed phrases can be broken down into two distinct phases: creation and storage.

• Safe Environment: The process must always begin with an environmental assessment. Avoiding public areas and prying eyes is the key here.

• Secure System: Advanced malware and viruses can lurk undetected on any device, whether a computer or mobile phone. It’s highly recommended to use a system that’s clean, free of any non-essential software, and disconnected from all networks.

• Custom Entropy: Seed phrase entropy is the level of randomness in the selection of the words. Even a minor pattern could be exploited by hackers. For instance, the name of a stranger is generally random. Yet checking it against the 100 most common names would yield a dramatic success rate. The same holds for seed phrases, making custom entropy that integrates physical phenomena like dice rolls highly important. (For more information, read our article Dice and Coins Entropy: Seedphrase Generator Protects Crypto)

• Sturdy Physical Device: Scribbling on paper, taking a screenshot, or writing a note on the cloud are all common mistakes. Using an external, dedicated device like a waterproof physical wallet is a far superior approach.

• Encrypted Storage: Metal engraving is sturdy, but it exposes the phrase to anyone who can read it, even if momentarily. The external device should encrypt the phrase to protect against prying eyes.

• Geographical Distribution: Disasters, both natural and otherwise, can strike when least expected. Thanks to encryption, it's possible to create multiple external backups of a seed phrase and store each in a different location. Even if one backup gets compromised, the phrase and the wallet will be as secure as ever.

• Keep It Cold: Storing the seed phrase in a dedicated, external, and forever-offline device makes it “cold”, i.e., inaccessible via the internet, Bluetooth, or any other remote means. It's critical to keep it that way. Using the seed phrase in an email, note, other applications, or any digital means will compromise the integrity of this entire process.

The process and tips outlined so far can protect crypto users against adiverse array of threats. While it's possible to implement each of theseguidelines by oneself, a DIY approach would be ill-advised for mostusers. As the popular saying goes, “Just because you can doesn't meanyou should.”

Cuvex is a field-tested seed phrase management solution that offersthe cutting edge of security straight out of the box. By combining anair-gapped device with military-grade encryption and tamper-resistant NFC cards, Cuvex has redefined the caliber of security for sovereigncrypto users.

• Truly Random Seed Phrases: Cuvex offers a powerful dice and coin entropy method to create the most random combination of words possible. Furthermore, the device supports 24-word seed phrases for maximum protection.

• Unparalleled Cybersecurity: The Cuvex device works 100% offline to encrypt, store, and interact with seed phrases in dedicated NFC cards. The encryption is performed in a dedicated chip that's inaccessible to everything else, adding another layer of security. The seed phrase is never stored anywhere other than the NFC cards with military-grade encryption.

• Failproof Setup: Cuvex supports multiple backups out of the box. Users can create as many NFC backups as they desire, making geographical distribution effortless. Even if an NFC card were to be compromised, the encryption would render it useless without the main device and the user’s Password.

• Seamless Experience: Despite the astronomical complexity of its security details, Cuvex manages to wrap everything under a seamless user experience. From a crypto user’s perspective, it's as simple as pressing a few buttons to unlock NSA-tier protection.

By capturing the secrets of countless crypto addresses into a collectionof 24 random words, seed phrases have become the de facto masterkey of the crypto world. It allows users to recover their fortunes againstfaulty software, malfunctioning hardware, and an entire host of otherthreats.

As long as the user holds the secret phrase, their decentralizedfortunes will never fall out of their grasp. Recovering access is as simpleas plugging this cryptographic word salad into any wallet.

Unsurprisingly, this has made seed phrases extremely valuable, asreflected by the steep rise in bad-faith actors targeting seed phrases aspart of their ever-evolving schemes. Creating and storing seed phrasessecurely has never been more important.

Cuvex offers the best-in-class solution by integrating an air-gappedsystem, military-grade encryption, out-of-the-box support for multiplebackups and encryption signatures—all powered by a portable device,some sturdy NFC cards, and an intuitive mobile application.

Thanks to Cuvex, non-technical users can roll out a crypto setup thateven the NSA couldn't crack. To learn more, visit www.cuvex.io