Lesson 3: Private Keys & Seed Phrases (How ownership works)

Goal: understand what keys are, what a seed phrase is, and how not to lose your bitcoin.

Beginner

A private key is like a secret key that opens a lock. If you have the key, you can move the bitcoin. A seed phrase is a set of words that can rebuild your wallet if your device breaks.

Intermediate

Wallets generate many private keys from one root secret (the seed). The seed phrase is a human-friendly backup of that root. If someone gets your seed phrase, they can recreate your wallet and take funds. If you lose it, you may lose access forever.

• Never store your seed phrase in a screenshot or cloud notes.
• Write it down and store it securely (ideally in more than one safe location).
• Do a small recovery test with a spare device/wallet when you’re ready.

Expert lens

Most modern wallets use hierarchical deterministic key derivation: a single seed produces an entire tree of keys/addresses. On-chain “ownership” is enforced by scripts requiring valid signatures from the corresponding private keys.