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What are Seed Phrases, Private Keys, Public Keys, Public Addresses?
When dealing with cryptocurrency, crypto wallets, etc you will hear these terms used often. Read here how they all work together.
Some accounts are created using Bip seed phrases – special kinds of phrases that can generate private keys. Seed phrases are a standard in the cryptocurrency community and are used across a number of software and hardware wallets (including MyEtherWallet and Ledger Nano S).
You can think of seed phrases like this:
A single 24 word seed phrase with a password/passphrase, along a particular path (called an HD path) will produce a particular private key.
That private key will then produce a public key.
That public key will then produce the public address.
Here is a standard 24 word seed phrase.
Using this password:
And this HD (hierarchical deterministic) path:
We will derive this Ethereum private key:
Which will then derive to this Ethereum public key:
Which will derive to this public Ethereum address:
(Do not use this account for any real funds…you will lose everything you put in there.)
In order to steal the funds out of a wallet, someone needs to know the seed phrase, and the password. Then they can just guess all the various HD paths (there are not that many options) until they get the private key.
Once they have the private key, then and only then can they attempt to take all the funds within the wallet.