A seed phrase is one of the most important pieces of data when it comes to digital assets management. While many online tools allow users to generate 12 or even 24-word seeds, we would strongly advise you against using any third-party solutions due to security concerns.
If you value the security and safety of your crypto assets, always make sure to use first-party seed phrase generators – that is, generators offered by your crypto wallet provider. Any reputable hardware or software wallet allows users to generate their seed phrases so they can restore or move their wallets between devices and retain access to crypto assets.
In this article, we are going to explain what steps you need to take to keep your crypto secure. But first, let’s briefly explain what a seed phrase actually is.
What is a seed phrase?
A seed phrase, also known as a mnemonic phrase or recovery seed, is a series of random words that are used to generate the private key for a cryptocurrency wallet. The seed phrase acts as a backup of the wallet and can be used to restore the wallet and access the funds in case of loss or damage to the original wallet.
Seed phrases are usually 12 to 24 words long and are generated by the wallet software. It is important to store the seed phrase in a secure location and not share it with anyone, as it is the key to accessing the funds in the wallet.
The wordlist for seed phrases has 2048 words. If a seed phrase contains 12 words, the number of potential combinations is 2048^12, or 2^132. Such a phrase has 132-bit security, meaning there are 340,282,366,920,938,463,463,374,607,431,768,211,456 possible combinations. The possibility of a hacker guessing the combination is virtually non-existent.
It is worth noting that a seed phrase grants access to your private keys. Whereas private keys are cumbersome to use and come in a string of 256 alphanumeric characters, seed phrases are typically 12 or 24 words long, and made up of regular words. This makes them easier to remember and store.
In addition, all seed phrases are constructed from 2048 different words first outlined in the Bitcoin Improvement Proposal number 39 (BIP-39), which introduced the famous Word List. Whether you use 12 or 24-word recovery phrases, there is essentially zero chance that a hacker could guess the combination. Also, the currently available computer hardware is insufficient to brute force it either.
How to generate a seed phrase using a Ledger hardware wallet? A guide to creating a 24-word seed phrase
In the following steps, we are going to outline what you need to do to set up your seed phrase when using a Ledger hardware wallet. First, you’ll need to download Ledger Live, a software platform that allows you to manage crypto assets and blockchain addresses.
Crypto assets managed by Ledger devices are not stored on the devices themselves, but are on the blockchain. Instead, Ledger wallets allow for the secure safekeeping of private keys.
Ledger is one of the most reputable crypto wallet manufacturers, boasting a rich selection of wallet products and a Ledger Live platform, which allows users to access crypto assets securely on both mobile and desktop devices.
Due to their robust design and easy-to-use interface, two Ledger wallets have made our list of the best crypto hardware wallets in 2023. In our opinion, the following crypto hardware wallets offer the best combination of quality and value for your money:
Ledger Nano X – The best cryptocurrency wallet on the market
Ledger Nano S Plus – A more affordable alternative to the Nano X
Trezor Model T – Trezor's flagship hardware wallet model
With that in mind, let’s proceed to the step-by-step device setup and seed generation guide.
Step 1: Connect your hardware wallet to your PC
After downloading the Ledger Live software from the Ledger homepage, you can proceed to start setting up your hardware wallet. First, connect your hardware wallet to your PC. Windows, Mac, and Linux systems are supported.
Step 2: Choose your PIN
Set your 4 to 8 digits long PIN number. The PIN will be used as another layer of security and a prerequisite to connecting to Ledger Live.
Step 3: Write down your Seed Phrase (Recovery Phrase)
Now comes arguably the most important step in the setup process. Your Ledger device will show a sequence of 24 words. In other words, a 24-word seed phrase generator will produce a unique and randomly generated mnemonic code.
Write down each word and confirm that by pressing both buttons on your device at the same time. The seed phrase should be written down on a piece of paper, and should not be photographed, stored on your PC or cloud. If you don’t adhere to these instructions, the security of your seed phrase is greatly compromised.
Step 4: Store your seed phrase somewhere safe
Now that you have written down your 24 words seed phrase, you should take care of it with utmost care. To reiterate, don’t photograph or store your seed in digital form. That makes it possible for hackers to steal it in case your accounts or devices are compromised.
In fact, the best way to protect your seed phrase is to use a metal wallet, which makes your seed phrase immune to hacking attempts, fire and water damage, and various natural disasters. Some of the best metal wallets available in 2023 are:
The Billfodl – A virtually indestructible metal case for seed phrase storage
Cryptosteel Capsule – Seed phrase storage with a unique and durable design
Cryptotag Zeus – A premium solution for seed phrase storage
All the aforementioned options can be integrated with Ledger devices seamlessly and elevate seed phrase storage to a new level.
Step 5: Your device is ready
Congratulations, you’ve successfully completed the Ledger crypto hardware wallet setup and used Ledger’s first-party 24-word seed phrase generator to protect your crypto. Now you’re ready to start adding applications and using your wallet to buy, sell, and transfer digital assets.
Keep in mind that the setup process between various hardware wallet manufacturers is very similar, so you can apply the steps above to Trezor, Keystone, and other popular wallet devices.
How to generate a seed phrase using the MetaMask software wallet? A guide to creating a 12-word seed phrase
In the previous section, we’ve used a Ledger wallet as an example of how to set up a crypto hardware wallet and generate a corresponding BIP39 seed. In this section, we are going to use MetaMask, a highly popular hot wallet, as an example of a software wallet.
The difference between hardware and software wallets lies in their inherent design. Whereas hardware wallets are offline, software wallets are connected to the internet. This allows users to use funds in their wallets more easily but comes as a detriment to security.
Step 1: Download and install the MetaMask extension
Head to the MetaMask homepage. From there, you can choose to download the MetaMask wallet, which will take you to the browser extension page.
Step 2: Create a new wallet (or import an existing wallet)
If you don’t have an existing wallet, you can choose to create a new wallet. You can also recover your existing wallet (which will require you to enter your Metamask 12-word seed phrase).
Step 3: Create a password
Generate a strong password to protect your MetaMask account. Store it in a secure location, as the password is not automatically stored for security reasons. After the password is entered, you can proceed to create a new wallet.
Step 4: Secure your wallet with a Secret Recovery Phrase
You can choose to generate and store a 12-word seed phrase to protect your MetaMask wallet, and make it easy to transfer your settings to a new device (see “Step 2”).
Step 5: Write down and confirm your recovery phrase
After clicking on the “Reveal Secret Recovery Phrase” button, the MetaMask seed phrase generator will reveal a randomly generated 12-word seed phrase.
After writing down the BIP39 mnemonic phrase, and storing it in a safe manner (metal wallet, dedicated password manager, safe deposit box, etc.), you’ll be asked to confirm your recovery phrase by entering three missing words from the MetaMask prompt.
Step 6: Wallet successfully created
Congratulations, you’ve successfully created your MetaMask wallet and used the first-party 12-word seed phase generator to secure your digital assets and make it easier to transfer your wallet between devices.
The process of setting up a MetaMask wallet is similar to other software wallets, so the steps outlined above can be used as a resource when setting up Trust Wallet, Coinbase Wallet, and other popular hot wallet solutions. In addition, the process can also be applied to NFT wallets, which allow users to engage with Web3 gaming and other NFT-related decentralized applications.
The bottom line: Seed phrase security should be handled with utmost care
Whether you’re using hardware or software wallet solutions, keeping your seed phrase safe is one of the most important aspects of keeping crypto assets secure, as it underlines the quality of your self-custody setup.
If you follow the tips outlined in the steps above and use a high-quality crypto hardware wallet, you’ll have no reason to worry about the safety of your digital assets, as your security will be essentially bulletproof. Just remember to safeguard your seed phrase appropriately, don’t share it with anyone, and, most importantly, try to keep it offline, as that drastically reduces potential attack vectors.
