What is a Passphrase?
An additional security layer to your seed phrase that protects against unauthorized access and enhances security and privacy
A passphrase in the context of Bitcoin wallets is an additional layer of security used alongside the seed phrase (recovery phrase). It acts like a password to the wallet, creating a "hidden" wallet within the primary wallet. This means even if someone gains access to the seed phrase, they cannot access the funds without knowing the passphrase. Passphrases enhance security, especially for high-value holdings or when used in conjunction with hardware wallets, making unauthorized access significantly more difficult.
When utilizing a passphrase with your Bitcoin wallet, follow these precautions:
- Don't Lose It: If the passphrase is lost, access to the associated funds is permanently lost, even if the seed phrase is intact.
- Don't Mess With It: Always enter the passphrase exactly as created; even a slight variation will generate a different wallet.
- Keep It Separated: Store the passphrase in a different location from the seed phrase to prevent both from being compromised simultaneously.
These precautions ensure enhanced security and prevent accidental loss of access.
In addition to enhancing security, passphrases can be used for:
- Plausible Deniability: Create decoy wallets with different passphrases, making it harder for attackers to determine which contains significant funds.
- Wallet Organization: Separate funds for different purposes (e.g., savings, spending, business) by using unique passphrases for each.