If you've generated a new seed for every wallet you used, you might in a situation where keeping track of all those seeds is getting more and more difficult.
You might be running out of hiding places, having trouble remember where they all are, tired of keeping track of which wallet holds what, etc.
But what if you could have just one seed yet still have multiple wallets?
This can be done using passphrases.
A passphrase is different from your 12-24 word seed phrase. It is an optional, advanced security feature that allows you to create a brand new wallet by adding an additional word or phrase to a seed. It is a part of the BIP39 standard and is supported by many wallets.
A passphrase can be (almost) anything (A-Z, a-z, 0-9, special characters i.e. ASCII characters) and each passphrase you add on to your seed is a new wallet.
In other words:
- Seed 1 = Wallet A
- Seed 1 + Passphrase 1 = Wallet B
- Seed 1 + Passphrase 2 = Wallet C
- Seed 1 + Passphrase 3 = Wallet D
You can have as many passphrases as you'd like and they'd each be a different wallet.
Security of a Passphrase
In addition, passphrases serve as a security feature against a physical security threat.
If someone happens to find your seed, they cannot access your coins without the passphrase. And by adding a very small amount to the seed without a passphrase, it deters one from investigating any further believing that's all you have.
From a pure numbers standpoint, a seed with a passphrase is more secure given one would not only have to "guess" your seed phrase but also "guess" a passphrase which can be any ASCII character (uppercase, lowercase, numbers, special characters) and over 100 characters. There is a virtually infinite amount of possibilities.
Knowing where to start if there’s no previous knowledge what kind of passphrase you’ve chosen (let alone knowing you use one) would be a daunting task.
So if someone happen to know you utilize passphrases, it really comes down to how well you've chosen your passphrase, how easily can they be guessed (i.e. not linked to any personal information) and kept any details of what your passphrases are, secret.
It would take an inside job with a combination of social engineering and poor operational, digital, and physical security practices on your part (which I doubt you'd have given you're already using the passphrase function as a security precaution) to even get close to a chance.
You might asking well, instead of keeping track of all those seeds, I now have to keep track of all those passphrases.
Yes! But there are distinct differences:
With multiple seeds, if one found one of your seeds, a portion of your assets are immediately threatened.
If you have a single seed with multiple passphrases, if one found your seed, none of your assets are threatened without also finding your passphrases and vice versa (let alone knowing if you have one at all).
A passphrase also introduces the ability for more convenient storage.
If you're not utilizing the wallet with just a seed, a seed without a passphrase is not much use. That also is true for the opposite: a passphrase without a seed is even more useless.
Thus, it is imperative that your passphrases are stored separately from your seed. (which you would have done anyway if you had multiple seeds, right?)
Multiple passphrases (vs multiple seeds) decreases the risk of unauthorized access if you have multiple copies of either your seed or your passphrase (since both are needed).
It decreases risk of digital storage (e.g. a password manager) given either your seed or passphrase is stored physically.
It allows to store your passphrases together for easier organization and management (given your seed is stored separately).
With multiple seeds, you cannot store them together without it being a huge security risk. They should be stored separately offline in different locations. That can be difficult to manage. Misplacing a single seed, means losing a portion of your assets.
For the organizational benefit alone, a single seed with multiple passphrases is a more practical way not to lock yourself out of funds. The additional security is just an added benefit.
The biggest threat to your wallet and your coins is often yourself.
You want to keep things easy to manage without making things more complicated. That in itself will result in longevity of your coins.
So if you've got multiple seeds, consider consolidating to just one and take advantage of the security features you have at your disposal. They were created for a reason. And that reason was to help you be secure from others and with yourself.