Key recovery and mnemonic code
In a blockchain, ownership of an asset is proven through a private key. However, you will not be transacting on only one blockchain network. There are already numerous blockchains in the market besides Bitcoin and Ethereum, and there are also networks that are layer 2 solutions. Each blockchain uses a different private key and address. You can also use multiple keys and addresses on the same blockchain network. How can I conveniently manage when there are so many private keys in my wallet?
Since it can be very difficult for users to manage the private key when using various blockchains, a standardized method is needed to create a private key and a way to easily recover it in case of loss. To do this, you can configure all keys generated within the wallet to be generated from a single piece of information, the master seed. The mnemonic code is a way to replace the master seed with human-readable words and to help the user to recover the wallet as long as the user has these words.
Most wallets require you to manually write the 24 (or 12) words that appear during the initial setup and keep them in a safe place. This is the master key that is generated based on the random number generated by the device and it allows users to conveniently manage various private keys. Since 24 words are the most important information for asset management, it should not be shared with anyone and must be backed up in case of loss or theft later.
Since all the multiple private keys and addresses that you manage are derived from a single master key, you can recover all the assets if you have the master key. However, if even one word (single spelling) is different out of 24 words, the original wallet cannot be restored.
The standardized methods of using mnemonic codes are presented in BIP 39. However, compatibility cannot be fully guaranteed as not all wallet companies have implemented them in the same way. Since the mnemonic code is the most important information required for recovering your wallet, you are presented with a set of seed values that are transformed into human-readable words that you can write down on a piece of paper, and keep in a safe place.
You must have the mnemonic code in order to recover the master key in case of loss or theft. Please be prepared in advance.