Entering the Blockchain World: Understanding Mnemonic Phrases and Private Keys
When stepping into the world of blockchain, we often hear how crucial private keys and mnemonic phrases are.
But what exactly are mnemonic phrases and private keys? Why are they so important? Which one is more important? What is their relationship? And what do private keys look like?
What is a Private Key?
A Bitcoin private key is essentially a random number, similar to rolling a die and getting a number. However, a Bitcoin private key is much longer: it is a 256-bit number consisting of 0s and 1s.
0100101…01010100 (total 256 bits)
How Do You Backup a Private Key?
With so many 0s and 1s, it can be dizzying to look at, let alone back up. Satoshi Nakamoto invented a special encoding (Base58) to convert the private key into a more easily backed-up state. For example, the following string is a common form of a private key:
KwYHFL7WfhJPkfQkp1LsUwHvy1Pd9KynuxjjVDMZvRSV5D9VJq3v
This form of the private key is relatively easier to back up and input. (Private keys generally start with 5, K, or L.)
What is the Use of a Private Key?
- Generating Your Receiving Address: Your receiving address is calculated from the private key.
- Authorizing Your Transactions: Your transactions are signed by the private key.
- Recovering Your Assets in the Wallet: The private key helps with this.
The private key is the electricity, the light, the ultimate authority. It is the only proof of ownership of your assets in the blockchain world. Possessing the private key means possessing the assets at the corresponding address.
Is the Private Key Safe?
As mentioned, a private key is a 256-bit random number, so the total number of possible private keys is 2 to the power of 256. This number is almost incomprehensible:
- “The diameter of a strand of hair is about 500,000 atoms thick. The total number of private keys is close to the number of all atoms in the observable universe.”
- “If every gram of matter on 360 Earths were to become an Earth, the total number of water molecules on these Earths would equal the total number of private keys.”
So, trying to obtain a specific private key through brute force is like finding a single water molecule on many Earths or finding an atom in the vast universe... and you can’t even find your keys at home.
Potential Risks with Private Key Generation
If the algorithm used to generate the private key is flawed, there can be risks. For example, if the random number generator of a wallet is not truly random, it could generate the same private key for multiple users. This is where the cryptographic expertise of the wallet team comes into play.
(Bither and Bitpie teams pioneered the “extreme randomness” algorithm, which adds user-side signals, sounds, images, etc., to the entropy pool when computing the private key, generating high-quality random numbers. This invention is one reason our team is recommended by bitcoin.org.)
What is a Mnemonic Phrase?
If private keys are so important, why do many wallets only back up 12 words and not the private key? Don’t worry, you’re not doomed. Let me explain.
A mnemonic phrase is typically a set of 12 words:
1. health 2. fine 3. profit 4. below
5. crowd 6. wish 7. task 8. gown
9. mind 10. surge 11. apple 12. max
What is the Use of a Mnemonic Phrase?
- Generating Your Receiving Address: Your receiving address is calculated from the mnemonic phrase.
- Authorizing Your Transactions: Your transactions are signed by the mnemonic phrase.
- Recovering Your Assets in the Wallet: The mnemonic phrase helps with this.
The mnemonic phrase is the electricity, the light, the ultimate authority. It is the only proof of ownership of your assets in the blockchain world. Possessing the mnemonic phrase means possessing the assets at the corresponding address.
What is the Relationship Between Mnemonic Phrases and Private Keys?
In essence, mnemonic phrases and private keys serve the same function. A mnemonic phrase is also a string of random numbers (128-256 bits). However, since both random numbers and private keys are inconvenient to use, the Bitcoin community adopted the BIP39 protocol, which allows random numbers to be converted into words from a specific word list.
(Bitcoin Improvement Proposals, or BIPs, are design documents providing information to the Bitcoin community and improving Bitcoin and its operating processes and external environment characteristics.)
Advantages of Mnemonic Phrases
Mnemonic phrases do not distinguish between uppercase and lowercase letters and are relatively common words, making them more convenient to use than private keys. Hence, mnemonic phrase wallets have gradually become mainstream.
A single mnemonic phrase can derive multiple private keys, each corresponding to a different cryptocurrency. If you have 30 different cryptocurrencies (BTC, ETH, LTC, EOS, etc.), you don’t need to record each private key separately. Just recording one set of mnemonic phrases allows you to control all your assets.
Bitpie wallet displays both mnemonic phrases and private keys to users, but generally, backing up the mnemonic phrase is sufficient. (We hide the private key in the top right corner of the receiving address QR code page.)
Are Mnemonic Phrases Universal Across Wallets?
Mnemonic phrases are generated according to the BIP32, BIP39, and BIP44 protocols of Bitcoin. Therefore, mnemonic phrases that follow these standard protocols can be used interchangeably across wallets. (However, due to varying security levels of different wallets, it is not recommended to mix and match mnemonic phrases across different wallets.)
Will Mnemonic Phrases Become Obsolete?
The introduction of mnemonic phrases has been approved by the core Bitcoin development team and the community, with corresponding BIP protocols written into the Bitcoin open-source code.
Historically, wallet backups have evolved from backing up wallet files to backing up private keys to backing up mnemonic phrases. Each new trend is backward-compatible, meaning the emergence of mnemonic phrases did not render private keys unusable. Similarly, if new backup methods are developed in the future, mnemonic phrases will still remain usable.
Precautions When Backing Up and Restoring Private Keys and Mnemonic Phrases
- Private keys consist of uppercase, lowercase letters, and numbers. Be mindful of these distinctions when backing up and restoring.
- Do not store private keys and mnemonic phrases on internet-connected devices. Carefully write them down on paper or store them on a cold storage device.
- The quality of different wallets varies. If there is no urgent need, try not to import and mix mnemonic phrases and private keys across different wallets.
What to Do If "Invalid Mnemonic Phrase" Appears During Restoration?
This usually happens because one word was copied incorrectly. Since the words are from a fixed word list, you can search for similar words in the list and try replacing the input.
Official English word list: BIP39 English Word List
Official Chinese word list: BIP39 Chinese Simplified Word List
Difference Between Chinese and English Mnemonic Phrases
Only the language is different; the usage is the same. Both Chinese and English mnemonic phrases have official word lists. However, since more wallets globally support English mnemonic phrases, and because the Chinese word list contains rare characters that can lead to embarrassing mistakes, it is recommended to use English mnemonic phrases. (Chinese and English mnemonic phrases cannot be converted to each other.)