When you set up a BitBox02, it generates a “long random number” which is converted into your 24 recovery words (also called mnemonic seed), such string is stored on the BitBox02 and as a wallet back-up on the microSD card.
Optionally, you can also write down your wallet backup in the form of 24 recovery words.
Subsequently, whenever the BitBox02 is used, it derives a cryptocurrency wallet via a (very simplified) formula.
- Formula: Wallet backup + passphrase => wallet
- If you don’t use a passphrase that is: wallet backup + “” (empty passphrase) => normal wallet.
- If you use a passphrase passphrase that is: wallet backup + passphrase => passphrase protected wallet.
Important characteristics of using a passphrase
- Any passphrase is valid, meaning that you won’t get an error message if you enter a different passphrase. If it is not 100% identical to the one you used when you set up your wallet, you will derive a different, empty wallet. Mistyping the passphrase will generate a completely new & empty wallet.
- A passphrase is not stored anywhere on the device. It has to be entered each time you want to access a passphrase-protected wallet.
- Passphrases are case-sensitive - Lowercase and uppercase characters are distinguished and count as different.
- If you need to restore your wallet, you will always need your wallet backup and the passphrase you used during the creation of that wallet.
- If you loose or forget your passphrase, you will forever lose access to your coins.