Why does word count matter? Because entropy matters. A 12-word BIP-39 seed phrase typically encodes 128 bits of entropy; a 24-word BIP-39 seed phrase encodes 256 bits (higher entropy = higher brute-force resistance). Both formats are widely supported, but the longer phrase adds an extra margin of safety for long-term cold storage.
In my experience, once you understand that the seed phrase equals the account, decisions get easier. Keep it offline. Always.
Step-by-step seed phrase setup (How to)
- Power on the hardware wallet and set a device PIN. Short PINs are convenient; longer PINs are safer. I prefer at least six digits for long-term storage.
- Choose to create a new seed phrase. The device will ask whether you want 12 or 24 words (choose based on your threat model).
- The device will then display each word on-screen. This is the display recovery phrase step — write each word down in order. Do not take photos or copy the words to a phone or cloud.
- After writing, the device will show a recovery phrase page that asks you to confirm several words (sometimes by selecting them, sometimes by entering them). Carefully follow the prompts to verify.
- Optionally complete companion app setup (desktop or mobile) and perform a firmware check before moving funds. See the firmware update guide: firmware-update-guide.
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And yes, always test a restore on a secondary device or emulator before you trust a single backup.
Verifying the recovery phrase (recovery phrase page & display recovery phrase)
When you reach the recovery phrase page, expect one or two verification steps. The device will either ask you to enter a word index ("what was word 7?") or to tap/select words in order. This is how the device confirms you copied the phrase correctly.
Do not sign transactions or connect the device to unfamiliar software until you finish verification and a firmware check. In my testing, skipping this step is one of the most common mistakes.
12 vs 24 word seed phrase — pros and cons
| Words |
Typical entropy |
Pros |
Cons |
Recommended for |
| 12 |
~128 bits |
Faster to write and verify; good compatibility |
Lower entropy compared with 24 words |
Everyday users storing moderate amounts or new users who need convenience |
| 24 |
~256 bits |
Stronger brute-force resistance; better long-term security |
Longer to write/verify; slightly more error-prone during setup |
Long-term holders, high-value cold storage, inheritance plans |
Which should you pick? If your holdings justify extra effort, choose 24 words. If you prioritize speed and convenience for lower balances, 12 words is acceptable. I believe many users will find 24 words worth the one-time inconvenience.
Protecting the seed phrase: paper, metal, and SLIP-39 (seed phrase metal backup)
Paper backups are common but fragile (fire, water, mold, theft). A seed phrase metal backup (steel plate) resists heat and moisture and is the preferred long-term option for many serious holders. But metal backups cost extra time to assemble and store securely.
Alternative: SLIP-39 (Shamir backup) splits the recovery into multiple shares so you can distribute risk geographically. This method can improve resilience but has trade-offs: fewer wallets support SLIP-39, and managing shares adds complexity. See the detailed SLIP-39 guide: slip39-shamir-backup and a seed backup plate primer: seed-backup-plates.
But don’t confuse physical durability with operational security. Keep backups in separate secure locations (bank safe deposit box, trusted family safe). And never store a photo of your seed phrase.
Passphrase (25th word) and multisig options
A passphrase (often described as a 25th word) adds a secret that modifies the derived accounts. It provides plausible deniability and extra security, since the base seed phrase without the passphrase won’t reveal the same accounts. However, if you lose or forget the passphrase, recovery becomes impossible. I’ve seen users lock themselves out by choosing obscure phrases and not recording a robust hint (do not store the passphrase with the seed phrase!).
Multisig is another route to higher security. Instead of a single seed, multiple keys (across devices or custodians) are required to spend funds. Multisig reduces single-point-of-failure risk and is worth learning for larger balances. See multisig-for-ledger for an overview.
Common mistakes & what happens if i lose seed phrase
Common mistakes I see:
What happens if I lose seed phrase? If you truly lose your only seed phrase and have no other backup, access to the funds is permanently lost (unless you used custodial services or set up multisig beforehand). That’s why redundancy matters. See the restore guide: restore-recovery-phrase and recovery scenarios: recover-if-device-lost.
Practical checklist: How to create, verify, and protect your seed phrase
- Unbox device and verify packaging (supply-chain check).
- Initialize device and set a PIN.
- Choose 12 or 24 words based on the table above.
- Write every word in order on the supplied sheet, then move to a metal backup if available.
- Complete the recovery phrase page verification on-device.
- Perform a firmware attestation check (see: firmware-update-guide).
- Store backups in geographically separate, secure locations.
- Consider adding a passphrase or multisig for high-value holdings.
And remember: test your restore process on a spare device before you move large sums.
FAQ
Q: Can I recover my crypto if the device breaks?
A: Yes — as long as you have your seed phrase (and passphrase, if used). Use the restore process on a compatible hardware or software wallet. See restore-recovery-phrase.
Q: Is Bluetooth safe for a hardware wallet?
A: Bluetooth increases the attack surface. For routine small transfers it can be convenient; for large cold storage transfers consider USB/OTG or air-gapped workflows. Read more: bluetooth-usb-nfc-security.
Q: Should I use a 12 vs 24 word seed phrase?
A: See the comparison table above. 24 words are better for long-term, high-value storage. 12 words are more convenient for everyday use.
Q: Is passphrase the same as the 25th word?
A: The passphrase concept is often described as a 25th word, but it can be any string. Treat it like a separate secret; losing it means losing access.
Q: What happens if the company behind my hardware wallet goes bankrupt?
A: Your seed phrase still controls your funds. Company insolvency affects firmware support and apps, but not the underlying private keys. See more: company-bankruptcy-what-happens.
Conclusion & next steps (CTA)
Seed phrase setup is a one-time effort that protects you for years. Take the time to choose 12 vs 24 words intentionally, verify on the recovery phrase page, and invest in a durable backup (seed phrase metal backup if you plan long-term storage). In my testing, these steps eliminate most common recovery problems.
Ready to set up or restore? Follow the full setup and restore guides: Full setup guide • Restore step-by-step • Passphrase 25th-word details.
Safe storage starts with a correct setup. Go through the checklist above, and consider multisig for larger holdings.
