Passphrase FAQ

The passphrase may not be a very advanced feature, but it is important to understand how it works. It can help protect your private keys from accidental or malicious exposure. But if you forget or lose a passphrase, then you will lose access to the associated funds.

You can create as many passphrase wallets as you wish. But on the ZERO, you can only work in one wallet at a time. If desired, you can sync multiple wallets with the LIQUID app to keep track of your portfolios.
For more information on how to use the feature, please read Create and use a passphrase wallet

Not in the backup of your Perfect Key or seed phrase

A passphrase is not part of your main wallet backup. The backup of your Perfect Key or seed phrase will only give you access to your main wallet. If you lose or forget your passphrase you will lose access to the associated funds. 

So it is important to make a separate backup of your passphrase(s) and ideally store it in a different location. (see FAQs below). 

Passphrase not password

A passphrase may seem similar to a password, but there are important differences. Unlike a password that unlocks a recovery secret, a passphrase is part of the seed phrase itself. It is also not stored on the ZERO. 

As a consequence there is no way to recover or even validate a passphrase: 

  • There is no ‘forgot your passphrase?’ functionality. You are responsible for remembering it and having a backup.
  • There is no such thing as an incorrect passphrase. Any possible passphrase that you add will generate a valid wallet. 
  • A passphrase can’t be displayed on your ZERO.
  • A passphrase can never be changed. In case your passphrase may be compromised, it is advised to create a new one and transfer funds.

Security benefits

A passphrase not only allows you to have multiple wallets, it also helps protect against unauthorized access. A passphrase is not stored on the wallet like the Perfect Key or seed phrase. As such it provides an extra layer of security and increases protection against attack vectors with physical access to a wallet.
As protection in case of physical threat, you can use your main wallet for a minor part of your crypto assets and a passphrase wallet for the main part of your funds. You can even create a ‘decoy’ passphrase wallet as well. If you take this scenario seriously, you’ll also need to consider which wallets you want to sync with LIQUID.
If you are under duress to unlock your ZERO, you can surrender your main wallet to the attacker while hiding your main portfolio.
A passphrase is only stored in the Secure Element for the duration of a session and it is encrypted. When the ZERO goes in standby mode or is turned off, the passphrase is wiped and will need to be entered again to open the wallet. But as long as your ZERO doesn’t go in standby mode you don’t need to enter your passphrase. For sensitive operations, like signing transactions, you’ll need to enter your PIN and, if so configured, your fingerprint.

On the ZERO it is not possible to see if or how many passphrase wallets you have. There is no setting to turn it on or off and there is no overview of your wallets. In the LIQUID app, you decide which wallets you want to sync. And you can easily transact between addresses from synced wallets in LIQUID.

A sufficiently strong password stored in a separate location can also help protect your assets in case the backup of your Perfect Key or seed phrase gets compromised.

FAQ

Will I need to create a new wallet or private key to use a passphrase?

No, you can keep your current wallet. There is no need to wipe it to use the passphrase feature. Each passphrase you add will create a new wallet and set of addresses. Sync multiple wallets with the LIQUID app to easily transact between them.

What are the requirements of a passphrase on ZERO?

The passphrase on ZERO aims to be compatible with other wallets. For interoperability you'll also need to consider the specifications of other wallets.

A valid passphrase on ZERO is between 1 and 512 characters long. All ASCII printable characters are allowed except ` , the Grave accent. A space is also a valid character.
So, a passphrase is case-sensitive and can be made up of separated words.

How should I store my passphrase(s)?

There is no one and only best way to store your passphrase, but in general you should keep it as secure as your Perfect Key or seed phrase. Just like your backup, it should be stored offline and kept private.

Memorizing your passphrase adds the benefit that it can’t be found. But the obvious risk is that you forget it. So if you have a complex passphrase or if you don’t often use it, stamping it in metal could be a better option.

If you make a physical backup of your passphrase, don’t store it together with the backup of your Perfect Key or 24 word seed. Treat it as 2-factor authentication to protect your funds in case the backup of your Perfect Key or seed phrase gets compromised.

It is your own responsibility to store it securely. If you lose your passphrase, you lose access to that wallet.

Can a passphrase act as a ‘duress PIN’?

No. You can set up a passphrase wallet with a small amount of funds that can act as a duress wallet. But this is something different than a separate PIN code that wipes your wallet when you enter it.