Thread by @unchainedcap

1/ Over the last month, we’ve talked a lot about #bitcoin seed phrases. From definitions to recording and storage methods, there’s a lot to know. Let’s recap everything we’ve covered so far...🧵

2/ First, what’s a seed phrase? Your seed phrase is where everything for protecting your bitcoin is derived from: these 12 or 24 words generate the keys that allow you to spend your funds, making it critically important that you protect this information.

3/ Most proper hardware wallets make it very difficult to initialize them without physically backing up a seed phrase, and software wallets often provide them, too. For example, here’s what Trezor’s card for backing up recovery seed phrases looks like:

4/ More technically, a seed phrase is the human-readable representation of a seed, which is really just a long string of random digits. The seed is used to generate your master private key, which generates the rest of your private keys.

5/ So that’s a seed phrase. But how do they work and what are the most important things you need to know to use them properly? We’ve covered a lot of these details over the last month, including FAQs, best practices, and more. unchained.com/blog/what-is-a…

6/ Seed phrases, generated by wallets that follow the latest bitcoin standards, pull from a list of 2,048 unique words established as part of Bitcoin Improvement Proposal 39, or BIP39.

7/ Each word represents a range of bits in that long random number that is your seed. You might recognize some of the words in the image below, which we pulled from that list!

8/ 2048 words may not sound like many at first, and it’s often hard to comprehend how this string of words could be all the information necessary to protect your bitcoin. Think it would be easy to guess someone’s seed phrase? Guess again.

9/ Thankfully, for all intents and purposes, it’s impossible to guess a seed phrase—that is, as long as you or your hardware device generates proper entropy (randomness!). There are about as many possible seed phrase combinations as there are atoms in the observable universe.

10/ Another thing you should know is that your seed phrase is fully interoperable across any wallet makers that implement the BIP39 standard. That means, by securing your seed phrases, you can eliminate your hardware wallet maker as a trusted party and a single point of failure.

11/ If anything ever goes wrong, simply restore your seed on another device made by the same or a different company!

12/ We covered how to replace or upgrade a hardware wallet in-depth here, and having your seeds backed up and protected is certainly helpful if you ever find yourself needing to do this: unchained.com/blog/how-to-re…

13/ As you can see, device-agnostic seed phrases are huge for bitcoin self-custody! If one or more manufacturers make a mistake, your seed phrase can be used to recover access to your bitcoin without depending on any third party to fix those issues.

14/ We covered these topics in-depth in our continuing education webinar in December.

15/ Speaking of third parties making mistakes, @phil_geiger took a deep dive in December on why you should always secure your seed phrases—even alongside the benefits of #multisig. unchained.com/blog/why-you-s…

16/ We’re proud to work with amazing hardware wallet manufacturers to design self-custody products that minimize trust & eliminate single points of failure.

17/ But sometimes hardware wallets fail, and when they do, securing your seed phrases gets you closest to being truly sovereign over your wealth.

18/ Great, so you know you need to secure your seed phrases. But how? We’ve got you covered there as well. There are lots of ways to record your seed phrases, and there are lots of ways to store them, but all this information can be overwhelming. Let’s break it down.

19/ There are many ways *not* to record your seed phrases: brain wallets, seedless backups, and digital backups just to name a few. All of these approaches introduce unnecessary risk to your bitcoin!

20/ You should record your seed phrases either on paper (laminated if possible) or with metal backups. Metal backups are ideal in most cases, and we covered which ones you should buy, how to use them, and more in our look at seed phrase recording methods: unchained.com/blog/seed-phra…

21/ But what about how to store them? Whether or not you use a multisig Unchained vault, there are definitely some principles and best practices to consider that can help you ensure your bitcoin remain yours—and survive through generations! unchained.com/blog/how-to-st…

22/ First, consider your bitcoin custody model: singlesig, singlesig+passphrase, multisig, or other models. Every approach will have different trade-offs when it comes to how you store your seeds, and you have to weigh these factors yourself and devise your own plan of action.

23/ Like with seed phrase recording, there are some easy storage methods we’d warn against: storing your seed phrases out in the open, in drawer/cupboard/shelf, in a filing cabinet, in your bag, or at your workplace are all generally not good ideas.

24/ If you’re an Unchained client, you can read our official seed phrase storage recommendations in our operational security guide here: unchained.com/wp-content/upl…

25/ Every seed phrase storage situation is unique, though: you should consider for yourself your custody model (should you use #multisig?), current or expected future value of your bitcoin, unexpected natural disasters, unnecessary complexity, and other safety risks.

26/ If this is all still a bit much to take in, don’t miss our January webinar, where our @clockwork_prior, @MsHodl, and @dmlayt covered operational security best practices for your Unchained account as well as how to properly record and store your keys.

end/ Thanks for following along as we’ve explored seed phrases. As always, sign up for either personal or business Concierge Onboarding if you want hands-on advice navigating these topics and more as you embark on your bitcoin self-custody journey. unchained.com/the-vault-conc…