What is a Seed Phrase and why is it important?

Many people still don't understand how seed phrases work, leading to numerous questions like "Can I do this or that?" They also don't grasp the importance of seed phrases, mistakenly thinking they are like passwords, assuming that if lost or forgotten, they can be recovered. Old understandings simply don't apply to the crypto world. Many misunderstandings have caused people to lose countless coins, including myself. That's why I understand these matters very well and constantly need to reiterate them.

Seed and Seed Phrase (sometimes referred to as Seed Word) are not the same.

The word "phrase" means a group of words, so sometimes it's called a "word," which doesn't really change the meaning. A Seed Phrase therefore refers to a set of phrases or words that, when combined, form a Seed. So, to put it simply:

"A Seed is the result of a Seed Phrase."

A Seed is not a Private Key, but rather a Master Private Key.

The word "Seed" means a germinating part of a plant. I really appreciate the meaning envisioned by its creators, as it implies having a seed that, when planted, always yields the same result. A Seed serves as the foundation for generating Private Keys, introduced in BIP32 (Bitcoin Improvement Proposal no. 32). This allows for the creation of virtually unlimited Wallet Addresses with a structure adaptable to multiple chains. This is why wallets or Hardware Wallets can store various coins across different chains using a single Seed Phrase.

As seen in the image, we can define a Path for each coin on each Chain. This standard has truly become the basis for software managing wallets. It elevated the security of storing Bitcoin and other coins of that era.

How to generate 128 bits of Entropy in a Master Seed.

Honestly, just the word "Entropy" is enough to make one's head spin, right? It's a term used in quantum physics that is incredibly difficult to explain. So what are ordinary humans like us to do? Users shouldn't have to suffer headaches. I'll explain Entropy in a video; I'm too lazy to type. You can watch it on the Bitcast channel. To spare users the headache, an additional standard was created in BIP39 (Bitcoin Improvement Proposal No. 39), allowing you to generate 128 bits of Entropy by randomly selecting 12 words, which is sufficient for security. However, most wallets use 24 words, which will give us 256 bits of Entropy in the Master seed.

The process of converting 24 words into 256 bits of Entropy in a Master Seed.

BIP39 contains a total of 2048 words, which can be viewed here. To convert words from our randomized list, we need to know two additional things:

1) Converting words to their order (Decimal)

The resulting order will be numbers in computer terms, called Decimal. The conversion method isn't difficult because we already have a word list. For example, the word "abandon" is found at order 1, "charge" is at order 309, "undo" is at order 1896, and "Zoo" is the last word at order 2048. At this stage, we are still communicating in human language, so it's not complicated. I believe the designers did a good job of keeping it this way for users, letting software or hardware wallets handle the rest. After all, it's easier to remember or write down words than to note down Entropy or the Master Private Key itself. That's the origin of BIP39.

No	Seed Phrase	Index
1	differ	495
2	luxury	1067
3	chase	310
4	spawn	1670
5	february	675
6	phrase	1311
7	light	1037
8	hotel	882
9	since	1610
10	woman	2024
11	change	306
12	purchase	1394
13	addict	27
14	member	1111
15	song	1658
16	joy	965
17	drill	536
18	jungle	969
19	basic	153
20	usage	1917
21	dinner	499
22	program	1376
23	situate	1614
24	regret	1446

2) Converting the sequence to Binary

In the Binary conversion step, if understood, this is where it starts to become computer language. People will start to get confused because we are going to communicate with a computer, and we need to make it Binary, which will only have 0s and 1s. Each position will be converted to Binary as 11 bits. If we want an Entropy of 256 bits, 11 bits x 24 = 264, which will exceed 256 by 8 bits. These last 8 bits will be used as the Check Sum for the last word. That's why many people ask me if they can choose their own words. The answer is yes, but you have to calculate the Check Sum for the last word yourself, which requires a certain level of understanding to do. So, I usually say it's not possible, but it actually is. I will write an article about how to randomly choose words using dice to randomize them, along with instructions on how to calculate the Check Sum. But for today, let's understand how Seed Phrase works and where it comes from. I will show you a comparison of how to convert a Seed Phrase to Binary.

No	Seed Phrase	Index	Index -1	Binary
1	differ	495	494	00111101110
2	luxury	1067	1066	10000101010
3	chase	310	309	00100110101
4	spawn	1670	1669	11010000101
5	february	675	674	01010100010
6	phrase	1311	1310	10100011110
7	light	1037	1036	10000001100
8	hotel	882	881	01101110001
9	since	1610	1609	11001001001
10	woman	2024	2023	11111100111
11	change	306	305	00100110001
12	purchase	1394	1393	10101110001
13	addict	27	26	00000011010
14	member	1111	1110	10001010110
15	song	1658	1657	11001111001
16	joy	965	964	01111000100
17	drill	536	535	01000010111
18	jungle	969	968	01111001000
19	basic	153	152	00010011000
20	usage	1917	1916	11101111100
21	dinner	499	498	00111110010
22	program	1376	1375	10101011111
23	situate	1614	1613	11001001101
24	regret	1446	1445	10110100101

 

Index must be adjusted to the Binary base

We need to subtract 1 from the Index because the binary value starting in computer language is 00000000000. Therefore, Index 1 means 0 in Binary, so we need to subtract 1 and then convert that value to Binary. We can use general online tools or use this table to compare Binary values.

If we convert everything correctly, the raw binary code that is 256 bits of Entropy will look something like this:
00111101110 10000101010 00100110101 11010000101 01010100010 10100011110 10000001100 01101110001 11001001001 11111100111 00100110001 10101110001 00000011010 10001010110 11001111001 01111000100 01000010111 01111001000 00010011000 11101111100 00111110010 10101011111 11001001101 101

There will be a total of 256 positions, with the last three positions used for the Checksum and the other 8 for the Checksum. The Checksum will look something like this:

Binary Check Sum: 10100101

The BIP39 Seed should look something like this:

384c3bf4ffd10ca423e4f25aeb8a69be90c5297f8f822676f85deef402c35eea0b712cdf51bdbd7d86f952c48acc5014a3fab133e749e78d2022ed01aa03c2b9

With this, we will get a Seed that acts like a Master Private Key, allowing us to create an unlimited number of wallets under this Seed.

Conclusion

I hope this article helps you better understand the function of a Seed Phrase. Regarding the question of whether we can choose the words ourselves, the answer is yes, but we need to know how to calculate the Checksum of the last word, which requires understanding. However, if you are truly interested, wait for the second article where we will use dice to randomly select words to create a Seed.

Ref:

https://github.com/bitcoin/bips/blob/master/bip-0039/english.txt

https://trezor.io/learn/a/what-is-bip32

https://armantheparman.com/dicev1/

https://drive.google.com/file/d/1lzrMrCkEq6ylfWh1p-CT7i4EpqZEU_g9/view