The open and royalty-free Decentralized Recovery (DeRec) Protocol can backup and recover mnemonic phrases (aka “seed phrases” or “secret recovery phrases”), private keys, or both.In fact, it can back up and recover pretty much any secret (see Understanding the Types of Secrets That Can Be Protected with the DeRec Protocol). But it’s important to know the difference because, although the two are very closely related, they are not the same thing. In terms of how they’re related, for every mnemonic phrase, there can be an infinite number of private keys. So, what does this mean when it comes to backing up these and other secrets and why should wallet developers consider enabling their wares with the DeRec Protocol?
Software-based cryptocurrency wallets are typically bound to a single unique mnemonic phrase. This is a phrase that’s automatically generated at the time a wallet is created and it usually consists of 12, 18, or 24 words. If you somehow lose access to your wallet (loss of the wallet itself, corruption of the system on which it’s installed, loss of your password to the wallet, etc.), this mnemonic phrase is all you need to recover the wallet and any of the private keys that are associated with that mnemonic phrase. This is why it’s so important to not only keep track of your mnemonic phrase, but to also securely back it up in a way that it can be easily recovered.
At the same time that you first install a wallet onto a computer or some other device, it might start you off with a default account on a public blockchain. That blockchain account comes with its own unique private key and that private key is tied to the wallet’s unique mnemonic phrase. However, what many people don’t realize is that, within that same wallet, they can usually create additional accounts for that same public blockchain or with other blockchains that are supported by the wallet.
For example, within MetaMask, you can originate additional Ethereum accounts, each with their own private key. If your MetaMask wallet includes five accounts, one of which was automatically created for you when you installed MetaMask, and the other four that you originated with MetaMask’s “New Account” feature, all five of those accounts – each of which has their own unique private key — will be associated with that wallet’s unique mnemonic phrase. And, if you should ever lose access to that copy of MetaMask, the mnemonic phrase that was bound to that copy can be re-entered into a fresh installation of MetaMask which in turn will restore access to all five of your Ethereum accounts along with their private keys.
So, when people say it’s a good idea to backup your wallet, what they usually mean is that it’s a good idea to backup your mnemonic phrase because there’s a 1:1 relationship between your wallet and its mnemonic phrase and a 1:many relationship between your mnemonic phrase and the blockchain accounts associated with it.
MetaMask and wallets like it can also keep track of your accounts from other wallets. For some people, this is a convenient way to manage multiple blockchain accounts for multiple public distributed ledgers using a single wallet. In some of these cases, as long as MetaMask supports the same chain(s) as the other wallet, the user may choose to import one or more of that wallet’s existing accounts into their Metamask wallet. Importing an account from one wallet into another is a relatively simple process. To import an account, all you need is that account’s private key. However, it’s very important to realize that, in this scenario, any imported accounts will not be associated with the target wallet’s mnemonic phrase.
When accounts are imported into a MetaMask wallet, those accounts are essentially orphaned from the parent mnemonic phrases that belonged to their original wallets. In other words, if and when you attempt to use a mnemonic phrase to recover a wallet that consisted of both original and imported accounts, the only accounts that will be recovered are the accounts that were originated through that mnemonic phrase in the first place. The imported accounts that came from other wallets will not appear in the recovered wallet. In the case of MetaMask, even if users turn on the optional Profile Sync feature (which relies on MetaMask’s cloud to set up multiple copies of the same wallet that stay in sync with each other), the syncing process excludes imported accounts.
In order to recover imported accounts, you will need access to one of three things:
- The private key associated with each imported account: these are the private keys that were used at one point to import the account.
- The original wallet(s) that were used to originate those accounts: Some users are likely to keep their old wallets active. If those wallets are still active, they can be used to gain access to the original accounts.
- The mnemonic phrase(s) that were originally bound to those original wallets: in the event that the older wallets are no longer around, they, like other wallets can be recovered with their unique mnemonic phrases.
Once you have access to the private keys through one of the three possibilities mentioned above, you can re-import the accounts in question into your recovered wallet.
As just described, there are some scenarios where, if all you have are the mnemonic phrases that are associated with each of your wallets, there’s an extremely high likelihood that you’ll always be able to recover the blockchain accounts associated with those wallets. However, there are some scenarios where certain blockchain accounts can easily end up orphaned from their parent mnemonic phrases. Minimally, you should be backing up the mnemonic phrases to all of your wallets. But that may not be enough, particularly if you lost track of which phrases go with which wallets.
It is therefore sensible to not only backup all of your mnemonic phrases, but all of your private keys as well. For these reasons, the DeRec Alliance encourages all wallet developers to consider supporting the DeRec Protocol. Not only does it offer a secure and fully decentralized means to back up and recover mnemonic phrases, private keys, and other important secrets, it’s also a great way for wallet developers to close the gap on protecting against the loss of both original and imported accounts.