Wallet passwords and passphrases

A wallet can be protected by several separate secrets. After a death, each one matters differently, and the differences are easy to underestimate. This page explains what each component protects and what it means when one is missing.

The access components

• PIN or device password: unlocks the device. It is not the backup. Without the device, a PIN is meaningless; without the PIN, the device is usually unusable.
• Wallet file password: some software wallet files can be encrypted with a password. Whether a password is needed depends on the wallet format and configuration; a Bitcoin Core wallet.dat can, for example, be encrypted or unencrypted.
• The passphrase (sometimes informally called the “25th word”): a BIP-39 passphrase added on top of the seed phrase. A BIP-39 passphrase is used together with the mnemonic to derive the final seed. Any other passphrase leads to a different valid deterministic wallet; only the intended combination leads to the expected addresses and balances.

The passphrase, carefully

A correct seed phrase without the right passphrase shows a different valid deterministic wallet, usually without the expected balance. This is one of the most common estate dead-ends: heirs enter a perfect seed phrase, see a wallet with no balance, and conclude “there is nothing”, while the intended addresses and balances appear only with the right passphrase. The reverse can also happen: a wallet with a balance that does not belong to the person who passed away. Either way, the visible outcome says nothing about ownership.

The passphrase is often stored separately from the phrase, by design: look for it where other secrets are kept, but never assume it exists. With a strong, high-entropy and completely unknown passphrase, recovery can be practically unfeasible. With limited or predictable candidate spaces, feasibility can differ and must be assessed per case; recovery is never guaranteed.

Passwords are not backups

A password or PIN protects access; it does not recover anything. Losing the seed phrase is not fixed by knowing the password, and losing the password is not fixed by having the file — a file password is only required when the wallet file in question is actually encrypted. PIN, wallet password and passphrase have different functions and are not always all required; which data is needed depends on the access or recovery route used.

Planning ahead

If you are an owner preparing your own estate: record in the secret-free inventory only that a passphrase may be in use and where an authorised person can find information about it, never the passphrase itself. Make agreements about who may use it and when, and involve your legal adviser in those agreements.

What to do with it

• Access is built from separate components: the device password or PIN, the wallet file’s password, and the optional passphrase on top of the seed phrase.
• When the estate is ready: which components are needed depends on the access or recovery route used; the passphrase is added to the seed phrase, the file password opens the file. None of them is a backup for another.
• The classic mistake: assuming the password is a backup (it is not), or entering a perfect seed phrase without the passphrase and seeing an empty wallet.
• If a component is missing: read what is realistically possible in wallet recovery.
• Until authority is confirmed, preserve every component in place and do not try combinations.

After a death

• Preserve every component in place, do not try combinations.
• Document what exists without writing the secrets themselves.
• If the access material is incomplete, recovery is realistically limited: some problems contain insufficient information to derive the missing secret, others are solvable in theory but computationally infeasible, while limited search spaces can sometimes be explored. Specialist assessment may be relevant only for defined problem types, never as a first step.

For the authenticator side of the same problem (codes, backup codes and security keys) see 2FA and wallet access after a death.