Please note that there may be differences between different Wallets. In general, what follows is usally the case.
- A Pin is the PIN you set to get into your Wallet. If you enter this wrongly a number of times, your Wallet is locked and you can only get back into your Wallet by restoring it with the Seedphrase (Backup Words).
- A Seedphrase, also called Backup Words, is a list of 12 to 24 words that form the backup of your Private Key. If you lose your Wallet, you can use your backup words to restore your Wallet to a new device.
- Please note that different brands of Hardware and Software Wallets may have different ways of regenerating your Private Key and Public Addresses from your Seedphrase. Different brands, or different Wallets of the same brand may use different derivation paths!
- Always keep your Seedphrase secret! Do not share it with anyone.
- A Passphrase, in the case of Bitcoin, is like an extra word you add to your Seedphrase. So write down this password and keep it in a safe place! It might be advisable to keep your Seedphrase and Passphrase separate from each other. Make sure you, and your heirs, know which Passphrase goes with which Seedphrase. With most Wallets, your Seedphrase is the foundation of your storage. You can think of this foundation as a fully usable Wallet which you can store bitcoin in. Once you have added a password, for example "Passphrase #1," the combination "Seedphrase + Passphrase #1" creates a completely new Private Key with associated public keys. So this is a different Wallet than your Seedphrase without a Passphrase.
This way, you can generate an infinite series of new Wallets by attaching different passphrases to your Seedphrase.
Seedphrase #1 = Wallet #1
Seedphrase #1 + Passphrase A = Wallet #1A
Seedphrase #1 + Passphrase B = Wallet #1B
Seedphrase #2 = Wallet #2
Seedphrase #2 + Passphrase A = Wallet #2A
Seedphrase #2 + Passphrase B = Wallet #2B
Important: Never risk large amounts of money before you are sure that you can restore a Wallet from your Seedphrase and possibly Passphrase. Test your backups!