Security and independence are crucial in the crypto space, which has a history of fraud and scams. With many Bitcoin self-custody solutions available, including online, mobile, and hardware wallets, you must wonder why theft keeps happening.
The truth is that most non-custodial crypto wallets rely on seed phrases—a point of failure that users must either memorize or store fervently.
Seedless wallets like Tangem address this issue by eliminating seed phrases, enhancing both security and simplicity.
What is a seed phrase?
A seed phrase, or mnemonic phrase, is a set of 12 to 24 random words used to generate a private key for accessing a cryptocurrency wallet.
While seed phrases provide a simple recovery method, they also come with significant vulnerabilities; the greatest is phishing. We discussed other vulnerabilities in this post: Everything About Seed Phrases in Tangem Wallet.
What is a seedless wallet?
A seedless wallet is a cryptocurrency wallet that does not need a seed phrase for setup or recovery. Instead, it uses other cryptographic technologies for key generation and signing across multiple parties or devices.
Seedless wallets offer a safer and easier way to manage cryptocurrency than traditional seed phrases. They eliminate the risk of losing access through a single point of failure, which can happen with seed phrases. This approach helps make it simpler for everyone, especially newcomers, to handle their cryptocurrencies.
How seedless wallets work: The Tangem case
Tangem generates and secures private keys using a combination of hardware and cryptography. Here's a straightforward overview.
Private key generation
When setting it up, the Tangem Wallet's secure chip uses a Hardware True Random Number Generator (TRNG) to create a unique, truly random private key. The randomness (entropy) is derived from the chip's physical sensors, ensuring each key is unpredictable.Private key storage
The generated private key is stored securely within the wallet's chip and never leaves it in an unencrypted form. This design ensures that the private key remains confidential and protected from unauthorized access, even from the user.Backup mechanism
Tangem backs up private keys by cloning them onto additional Tangem cards or rings. During this process, a secure communication channel is established between the cards using the Diffie-Hellman key exchange protocol.
Tangem Wallet provides a secure and user-friendly approach to managing cryptocurrency private keys without relying on seed phrases. Learn more about the Tangem process here: How Tangem Wallet backs up private keys.
Why the seedless approach is the best
Seedless wallets are a much better alternative to seed phrase wallets. Over $200 billion in crypto assets alone have been lost due to mismanaged seed phrases, highlighting its vulnerability.
With seedless, you get these benefits:
- Better key management: Instead of relying on a single seed phrase, you can have multiple physical devices that do not expose your private key.
- Enhanced security
Seed phrases are vulnerable. They must be written down, stored securely, and kept away from prying eyes. If exposed, anyone can access your funds. With no seed phrase to worry about, your crypto remains secure against common threats like phishing attacks, physical theft of recovery phrases, or accidental exposure.
- Simplified user experience
Seed phrases can be intimidating for beginners. Misplacing or improperly storing a recovery phrase can lead to the permanent loss of funds. Tangem offers a backup solution through additional cards in case of loss or damage. Simply link multiple cards to the same wallet for easy access, ensuring redundancy without compromising security.
- Resistance to human error
Human error is a significant cause of crypto loss. Users often fail to recognize phishing attempts designed to steal them. With no seed phrase to lose or disclose, you are safeguarded against many avoidable mistakes.
Conclusion
Tangem redefines cryptocurrency storage by doing away with the seed phrase and solving long-standing security and usability issues. Whether you are a seasoned investor or a newcomer to crypto, our seedless design provides real peace of mind.