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Contents

 * 
 * 1. How to generate a seed phrase with Vault12?
 * 2. How to generate a seed phrase with a calculator?
 * 3. How to generate a seed phrase with dice?
 * 4. How to generate a seed phrase with software crypto wallets?
 * 5. How to generate a seed phrase with hardware wallets?
 * What goes on behind the scenes of generating a seed phrase?
 * How much entropy should your seed phrase have? 
 * How are SHA256 and BIP39 word lists used to generate a seed phrase?
 * What are some different ways to perform Random Number Generation (RNG)?
 * What are the security considerations of generating your own seed phrase?


 

Glossary
Crypto Security How-to's


HOW TO GENERATE A SEED PHRASE.

HERE ARE FIVE POSSIBLE WAYS TO GENERATE A SEED PHRASE, AND A MORE IN-DEPTH
DISCUSSION ON THE IMPORTANCE OF RANDOMNESS IN ENSURING SECURITY.


VAULT12 CRYPTO SECURITY


SOCIAL RECOVERY VAULT FOR DIGITAL ASSET SECURITY + DIGITAL INHERITANCE FOR
PROTECTING THE FUTURE OF MONEY.

Full Bio >
Vault12 Crypto Security


ART KROTOU

ART IS A CRYPTO-SECURITY EXPERT AND RESEARCHER WITH SERIAL ENTREPRENEURSHIP
BACKGROUND. HAVING A DEGREE IN PHYSICS AND EXPERIENCES IN MULTIPLE CUTTING-EDGE
INDUSTRIES LIKE FINTECH, SECURE HARDWARE AND SEMICONDUCTORS, AND IDENTITY GAVE
HIM A UNIQUE MULTI-FACETED PERSPECTIVE ON THE PROBLEM OF KEY MANAGEMENT FOR
INDIVIDUALS IN THE CRYPTO NETWORKS AND THE EVOLUTION OF THE INTERNET IN GENERAL.


IN HIS CURRENT WORK, HE IS SPECIFICALLY RESEARCHING HOW CRYPTOGRAPHIC KEYS CAN
BE INHERITED WITHOUT POSING A THREAT TO 3RD PARTIES IN EDGE CASES. IN ADDITION,
HE ADVOCATES FOR "FAULT-TOLERANCE VIA SECRETS AUTOMATION". HE DISCUSSES THE
QUANTITATIVE IMPACT OF USER EXPERIENCE FACTORS ON THE UPTAKE OF NON-CUSTODIAL
SOLUTIONS.


AS ONE OF HIS MOST NOTABLE ACCOMPLISHMENTS, HE CO-FOUNDED AND LED THROUGH THE
EARLY YEARS OF THE COMPANY THAT CONTRIBUTED TO THE COMPLEX TECHNOLOGY
BEHIND APPLE'S RECENT M-SERIES CPUS. HE IS ALSO THE CREATOR OF THE MOST FRIENDLY
AND AESTHETICALLY PLEASING, BUT NONETHELESS SUPER SECURE AND FAULT-TOLERANT
HARDWARE WALLET - U•HODL.


CHECK OUT HIS CURATED SERIES OF "VAULT12 LEARN" CONTRIBUTIONS BELOW, AND FOLLOW
HIM ON TWITTER AND LINKEDIN FOR MORE SHARP INSIGHTS.

Full Bio >
Art Krotou
May 11 2023



Here are some common ways to generate seed phrases. Please click through the
links provided in this article to get more detailed instructions.

Your seed phrase is a mnemonic code consisting of 12-24 words that is used to
recover your cryptocurrency wallet. It is sometimes called a backup phrase,
recovery phrase, or mnemonic sentence. It is the foundation of most modern
wallets and the crypto universe in general.


> A Mnemonic phrase is an encoded source of entropy, or randomness, that
> identifies your wallet within the digital universe.







> TL;DR
> 
> Even when you have your own crypto wallet, you have a few choices for how to
> generate your seed phrase.
> 
> It is extremely important that your seed phrase be randomly generated, so that
> it cannot be guessed or reverse-engineered.
> 
> Seed phrases with more words have more entropy / randomness than those with
> fewer words.
> 
> You can let your wallet generate a seed phrase for you.
> 
> You can also use the Vault12 app to generate a more robust seed phrase for
> you.
> 
> For added security, you can "roll your own" seed phrase with dice, or use a
> calculator, as offline methods.
> 
> Computer-generated methods of random number or seed phrase generation are
> simpler, but can be hard to verify as safe and effective.
> 
> The BIP39 standard determines how random numbers are securely translated into
> a seed phrase. This is explained in further detail.


1. HOW TO GENERATE A SEED PHRASE WITH VAULT12?

Vault12 allows you to create is an encrypted and distributed digital vault.
Vault12 secures digital assets including cryptocurrency seed phrases, and also
generates your seed phrase for you. You can be absolutely sure that your seed
phrase is generated safely and automatically backed up in a secure manner.
Please read our guide to learn more.


2. HOW TO GENERATE A SEED PHRASE WITH A CALCULATOR?

Generating a seed phrase by using a calculator is done offline, and this removes
a wide range of potential attacks. You'll need a calculator that has a RANDOM
function to generate entropy. This also introduces new risks, however - instead
of using one device to generate your seed phrase, you'll need to use two
devices: the calculator and an air-gapped computer. Learn more about generating
a seed phrase using an offline calculator here.


3. HOW TO GENERATE A SEED PHRASE WITH DICE?

The humble dice can be used for a non-digital and completely offline method of
seed phrase generation. To do this, you'll need dice, a pen and paper, and the
BIP39 word list - be prepared to do some math! You can use a single die if you
want, but it is recommended to use multiple dice. You'll be creating entropy by
generating a large random number by using the dice. Learn how to generate a seed
phrase with dice here.


4. HOW TO GENERATE A SEED PHRASE WITH SOFTWARE CRYPTO WALLETS?

With very few exceptions, most modern wallets will create your seed phrase for
you when you create your wallet. This process is usually automatic, with limited
options for setting the parameters of your seed phrase. For most users this
one-time approach is sufficient, and it won't be thought of again.

> Please keep in mind, that in any potentially high net-worth use case,
> generating seed phrases manually on your own - especially offline - is an
> excellent choice for much higher security and greater control over the
> process.

Please take a look at the article, "Using crypto wallets to generate seed
phrases" to get an overview of how seed generation is done inside wallets during
the set up phase.

See Crypto Wallet Guides for step-by-step instructions on how specific wallets
accomplish this.


5. HOW TO GENERATE A SEED PHRASE WITH HARDWARE WALLETS?

Hardware wallets provide an extra level of security compared to software wallets
and provide methods to generate a seed phrase within the wallet itself. Hardware
wallets strike an excellent compromise between usability and extra security. We
are currently working on "how-to" guides to bring you through the steps needed
to securely generate and back up seed phrases using hardware wallets - please
stay tuned!

Here are some hardware wallets that we recommend:

 * Ledger Nano X
 * Ledger Nano S
 * Trezor One
 * Trezor Model T
 * KeepKey
 * ColdCard MK3
 * BitBox 01/02


WHAT GOES ON BEHIND THE SCENES OF GENERATING A SEED PHRASE?

The process of generating a seed phrase starts with generating random data,
called entropy. The entropy is then run through a hashing function, specifically
SHA256, to generate the checksum. Part of the checksum is then added to the
random data. The resulting output is then split into chunks of 11 bits, where
each 11-bit chunk maps to a single word on the BIP39 word list.

Confused about anything in the above paragraph? Don't worry, each step will be
explained in an easy to understand format below. You can also get a higher-level
understanding of seed phrase construction by checking out "What is BIP39?".


HOW MUCH ENTROPY SHOULD YOUR SEED PHRASE HAVE? 

Generating a seed phrase HAS to begin with a RANDOM SOURCE OF DATA, otherwise an
attacker could possibly steal funds by regenerating your seed phrase. Entropy is
a measure of how random a set of data is.

Which is more random? Rolling 1 dice, or rolling 2 dice? Since 2 dice have more
possible outcomes, the measurement of randomness is higher. It is the same for
your seed phrase. The more words that are in your seed phrase, the higher the
entropy will be.

To successfully generate a seed phrase, the entropy generated has to fit certain
parameters. The random data must be between 128 bits and 256 bits of entropy,
and divisible by 32.

128 bits of entropy maps to a 12 word seed phrase

160 bits of entropy maps to a 15 word seed phrase

192 bits of entropy maps to an 18 word seed phrase

224 bits of entropy maps to a 21 word seed phrase

256 bits of entropy maps to a 24 word seed phrase


HOW ARE SHA256 AND BIP39 WORD LISTS USED TO GENERATE A SEED PHRASE?

A hash function is a computer program that takes an input of data and returns a
verifiable result, called a checksum. The input can be any source of data, and
running the same hash function again will always return the same checksum as the
result.

For example, running your random source data of 128 bits of entropy through a
hash function will always return the same result as the checksum. If you change
anything in that source data, you will get a different result from the hash
function.

In this step, the random source data is run through a SHA256 hash function. The
first X digits of the checksum are then added to the random source data/entropy,
where X is equal to: (amount of bits of entropy / 32).

256 bits of entropy (256/32 = 8) - add the first 8 bits of the checksum to the
random data

224 bits of entropy (224/32 = 7) - add the first 7 bits of the checksum to the
random data

192 bits of entropy (192/32 = 6) - add the first 6 bits of the checksum to the
random data

160 bits of entropy (160/32 = 5) - add the first 5 bits of the checksum to the
random data

128 bits of entropy 128/32 = 4) - add the first 4 bits of the checksum to the
random data

It's important to note that BIP39 generates the seed phrase from binary code,
which is made up of 0's and 1's. However, the SHA256 hash function returns the
checksum as a sequence of numbers and letters, called a hexadecimal. So in order
to get the seed phrase, you have to convert the checksum from hexadecimal format
to binary format.

Here's the next step: We slice the result into 11-bit chunks of data. Each
11-bit chunk of data will map to a word from the BIP39 word list

You have seen the word "bit" used a few times in this article. A bit represents
0's and 1's. It is the smallest representation of data we have, and it is
expressed in a language our computers understand.

Your original source of random data (or entropy) plus the SHA256 checksum is
divisible by 11. The BIP39 word list contains 2048 words, and each word on the
list maps to 11 bits of data. In this next step, you break your entropy+checksum
combo into sequential chunks of 11 bits.

It is important that you slice the 11-bit chunks in sequential order. This means
going from left to right, every 11 bits is grouped together. Every 11 bits
represents a word in your seed phrase, and the order of the words has to be
correct.

The next step is to convert your 11-bit sequence into decimal format. This will
give you a number that maps to the BIP39 word list. Now, in the correct order,
map each 11-bit sequence to the matching word in the BIP39 word list. Finally,
this is your seed phrase!

It's important to highlight that some word lists for BIP39 might start with 1.
In code, the first number is always 0. This means that 2048 words are listed as
0-2047, not 1-2048. If your BIP39 word list starts with 1 instead of 0, you will
need to subtract 1 from the word list numbers to get the correct word.


WHAT ARE SOME DIFFERENT WAYS TO PERFORM RANDOM NUMBER GENERATION (RNG)?

Going back to generating your initial source of randomness: Once you generate
the needed entropy, the remaining process of getting the seed phrase is simply
math and cryptography. In practice, this means that when generating a seed
phrase, the initial source of entropy is both the most important step, and also
the step in which you have the most control over the result.

There are many ways to generate entropy: flipping a coin, rolling dice, dealing
a deck of cards, recording ambient sound, and many more. The goal here is to get
as close to true randomness as possible. If you are using a process that is not
sufficiently random, an attacker can recreate your seed phrase.

In the following sections of this article, we will cover different approaches
for how to generate entropy, and thus generate your seed phrase.


WHAT ARE THE SECURITY CONSIDERATIONS OF GENERATING YOUR OWN SEED PHRASE?

Taking control over the generation of your seed phrase provides the ability to
increase the entropy of your seed phrase, thus increasing the security of your
entire wallet. This does not come without risks - a single mistake can result in
a less secure wallet, even lost funds.

When generating your own seed phrase, security must be top of mind throughout
the whole process. The most crucial part of generating your seed phrase rests
with the generation of entropy, which is the first step of generating your seed
phrase.

Your seed phrase can have 12, 15, 18, 21, or 24 words. The more words in your
seed phrase, the higher the entropy, which means higher security. A correctly
generated 24-word seed phrase will ALWAYS produce a wallet that is more secure
than a 12 word seed phrase. Many wallets today only produce 12-word seed phrases
in their built-in wallet creation workflow, but it's important to note that
12-word seed phrases are still very secure.

The key concept here is `correctly generated`. The only parameter that can be
changed is the source of entropy. This is very important because if the source
of entropy is corrupted, an attacker can potentially regenerate your wallet and
steal your funds.

Generating entropy can be done manually or with a computer. Both methods have
pros and cons. When generating entropy, care has to be taken to ensure the
process is being done correctly and is free from outside manipulation.

A basic example of manually generating entropy would be flipping a coin. In this
example, if an attacker gives you a coin that is weighted slightly in favor of
heads, your initial source of entropy will have been corrupted.

When using a computer to generate entropy, the attack vectors (or corruption
attempts) can be both over the internet and physically in-person. The computer
being used should not be connected to the internet, as that provides an
opportunity for attackers to compromise the process. However, even if the device
was ever connected to the internet, this allows for an opportunity to corrupt
this process.

Part of being in a security mindset means limiting opportunities available for
bad actors. A device not connected to the internet is considered air-gapped,
which means an attacker has to be physically present at the device to be
successful at manipulating the entropy.

If you don't have a spare device that you can airgap, don't worry - you can use
a "live" Linux environment. Many Linux operating systems are able to be run off
of a portable USB stick or flash drive. These are called `live` distributions
and they're released with verification signatures, so you can easily verify that
the operating system has not been tampered with. We highly recommend Tails OS -
a portable OS that protects against surveillance and censorship. To run the
operating system, just plug in the flash drive and boot it up. When you're done,
simply remove the flash drive and return it to your normal operating system.





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Crypto Security How-to's


HOW TO GENERATE A SEED PHRASE.

HERE ARE FIVE POSSIBLE WAYS TO GENERATE A SEED PHRASE, AND A MORE IN-DEPTH
DISCUSSION ON THE IMPORTANCE OF RANDOMNESS IN ENSURING SECURITY.


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