What Are Seeds and Mnemonic Codes?

 What Are Seeds and Mnemonic Codes?

What Are Seeds and Mnemonic Codes?


Bitcoin HD wallets are a really powerful mechanism for managing many keys and addresses. They’re even more useful if they’re combined with a uniform way of making seeds from a sequence of English words that are
easy to transcribe, export, and import across wallets. this is often referred to as a mnemonic and therefore the standard is defined by BIP-39. 


Today, most bitcoin wallets (as well as wallets for other cryptocurrencies) use this standard and may import and export seeds for backup and recovery using interoperable mnemonics. Let’s check out this from a practical perspective. Which of the subsequent seeds is simpler to transcribe, record on paper, read without error, export, and import into another wallet?
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Wallet Best Practices

As bitcoin wallet technology has matured, certain common industry standards have emerged that make bitcoin wallets broadly interoperable, easy to use, secure, and versatile. These common standards are:

  • Mnemonic code words supported BIP-39
  • HD wallets supported BIP-32
  • Multipurpose HD wallet structure supported BIP-43
  • Multicurrency and multi-account wallets, supported BIP-44

These standards may change or may become obsolete by future developments, except for now, they form a group of interlocking technologies that became the de facto wallet standard for bitcoin. The standards are adopted by a broad range of software and hardware bitcoin wallets, making these wallets interoperable. A user can export a mnemonic generated on one of these wallets and import it in another wallet,
recovering all transactions, keys, and addresses. Some samples of software wallets supporting these standards include (listed alphabetically) Breadwallet, Copay, Multibit HD, and Mycelium. samples of hardware wallets supporting these standards include (listed alphabetically) Keepkey, Ledger, and Trezor.
Using a Bitcoin Wallet
In “Bitcoin uses, Users, and Their Stories” we introduced Gabriel, an enterprising young teenager in Rio de Janeiro, who is running an easy web store that sells bitcoin-branded t-shirts, coffee mugs, and stickers.
Gabriel uses a Trezor bitcoin hardware wallet (Figure 5-4) to securely manage his bitcoin. The Trezor may be a simple USB device with two buttons that store keys (in the shape of an HD wallet) and sign transactions. Trezor wallets implement all the industry standards discussed during this chapter, so Gabriel isn’t reliant on any proprietary technology or single-vendor solution.

When Gabriel used the Trezor for the primary time, the device generated a mnemonic and seed from a built-in hardware random number generator. During this initialization phase, the wallet displayed a numbered sequence of words, one by one, on the screen.

Trezor device generated a mnemonic and seed

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