Mnemonic phrase

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A mnemonic phrase, often referred to as a seed phrase, recovery phrase, or backup phrase, is a sequence of typically 12 to 24 simple words that acts as a master key for your cryptocurrency wallet. This phrase is generated when you first set up a new crypto wallet and it encodes all the information needed to access and recover digital assets.

If your device (computer, phone, or hardware wallet) is lost, stolen, or damaged, the mnemonic phrase allows you to restore your entire wallet and all its associated cryptocurrencies on a new device. The words are chosen from a standardized list (BIP-39 wordlist), and their specific order is critical. It is paramount to store your mnemonic phrase securely – typically offline, in a physical, tamper-proof location, and never digitally where it could be accessed by hackers.

Losing your mnemonic phrase, or having it compromised, could mean a permanent loss of access to your cryptocurrency holdings. It represents a fundamental aspect of self-custody in the crypto world, empowering users with full control over their assets but also with the responsibility for their safekeeping.

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