How Abra Works

Private keys and Abra recovery phrase

Understanding how the Abra recovery phrase works is critical for anyone learning to navigate the emerging world of decentralized finance.

The Abra recovery phrase is an easy-to-use version of a crypto private key and allows Abra users to store assets on their phones. Those assets are accounted for on the Bitcoin blockchain and, using the private key/recovery phrase system, become available to invest in a number of assets all from the Abra wallet.

Abra’s recovery phrase plays a critical role in the security and overall functionality of each Abra wallet. More importantly, if the recovery phrase is not properly written down or backed up, then Abra users run the risk of permanently losing access to their assets.

An Abra wallet exists as decentralized, blockchain-based asset storage, which means Abra never has access to the funds stored by individual users. If an Abra user loses or records the wrong recovery phrase, there is nothing any Abra team member can do to regain access to the assets stored in that wallet.

Let’s take a look at how Abra’s wallets work and best practices for managing an Abra recovery phrase:

What is a non-custodial wallet?

Abra is a non-custodial wallet. That means that each Abra user has control over the private keys which enables access to their wallet. Abra wallets are Bitcoin-based, and the private keys to each wallet are linked to each individual user’s mobile device.

A non-custodial wallet is a powerful tool when wielded correctly. It allows Abra users to maintain a level of control over their assets that is just not possible when compared to traditional finance and banking.

Most financial service providers, as well as some major crypto exchanges, are custodial. A custodial service controls users’ assets, and structure-wise they exist as centralized databases containing valuable user information including asset balances.

From a security perspective, it’s no wonder why there seems to be an endless stream of news articles about major data hacks at crypto exchanges, banks, insurance companies, credit card providers, etc. Those big pools of centralized data represent massive attack surfaces for hackers and digital criminals to exploit.

In the non-custodial model, attack surfaces become distributed. And while individual mobile devices might become compromised through porting, social engineering, or some similar means — and that kind of behavior would definitely impact individual users — there is no central network or account to hack and steal from.

For a long time, centralized, custodial accounts were the only kinds of financial services and products available. Now, following the introduction and maturation of Bitcoin and related cryptocurrency technology, that’s no longer the case. Today, there are easy-to-use non-custodial services like Abra that are more secure than traditional alternatives.

What’s more, a blockchain-based non-custodial wallet also provides a massively powerful platform that allows Abra users to fully leverage the power of crypto’s programmable money. Abra can only exist as a globally accessible app available to everyone regardless of banking or accredited investor status because of the non-custodial model.

When using a non-custodial wallet, individual users are accepting the responsibility for the control of their assets. So if a recovery phrase, or a private key, is lost or compromised, there is no way for Abra or for anyone else to do a workaround to regain access to those funds. It’s not like you can call a centralized corporation and ask for your account to be restored — the equivalent in the decentralized world does not exist.

Recovery phrase: What is it and how does it work?

The Abra recovery phrase is based on a Bitcoin private key. Outside of Abra, you might hear the concept of a recovery phrase referred to as a seed phrase or a wallet seed, which all mean the same thing.

Bitcoin’s real breakthrough is that it creates a distributed, verifiable public ledger in the form of a series of blocks of confirmed transactions (also known as the blockchain). The computation involved in confirming and packaging those blocks into a record of transactions (a process known as mining) is so resource-intensive in terms of computing power and energy, that it becomes extremely expensive to create some kind of attack to compromise the transaction record that the Bitcoin network is documenting.

And this level of computational robustness happens across a series of nodes that are running on computers all around the world. The result is that no government, corporation, or single entity owns the Bitcoin network, which means that the distributed ledger, which can be used to carry out peer-to-peer trusted transactions without the need for a middleman, can be accessed by anyone, at any time.

In order for Bitcoin’s distributed ledger to work and to be accessible by potential users from anywhere in the world, Bitcoin was developed using a system of public key cryptography (this, by the way, is also how cryptocurrencies got their name).

There are three components to this cryptographically-protected process as they pertain to the Abra recovery phrase — the wallet, the public key, and the private key. A Bitcoin wallet is a little bit of a misnomer because actual user assets are not stored in the wallet, instead the wallet acts like an interface between the blockchain device where a user’s private keys are stored (usually a desktop, a paper or hardware wallet, or in the case of Abra, on a mobile device).

The private key, accessible through the wallet, maps to a public key (also called a public address) on the blockchain that shows the bitcoin balance for that address, which allows for public auditing (anyone who knows where to look on the blockchain can see how much bitcoin lives at the public address, and people can have multiple public addresses). Public keys are a string of letters and numbers but can also be represented by QR codes and they are what people share in order to receive inbound bitcoin payments.

Finally, the only way to send bitcoin (either to another bitcoin wallet or to a third-party to convert bitcoin to another crypto or fiat currency) is to have access to the private key.

When first setting up an Abra wallet, users are issued a recovery phrase which acts as a unique identifier. In the background, the Abra user is creating a hierarchical deterministic or HD wallet. The actual recovery phrase is a 128-bit encrypted value that is converted to a sequence of 13 randomly generated words, creating a mnemonic phrase that is easier for people to document.

The great thing about this particular setup of wallet and recovery phrase is that is it robust in terms of what can happen on the backend. Abra users are able to transact across an array of different kinds of assets without having to restructure their wallets or reset their Abra recovery phrase.

It should be noted that Abra wallets are designed to work with individual mobile devices, so users should not try to install the same wallet, using the same recovery phrase on multiple devices and expect to have all of Abra’s features accessible in multiple places.

When the Abra recovery phrase is properly documented (if unsure, the recovery phrase can be checked and confirmed under the “wallet security option” in the menu of the Abra app), then Abra users can move their wallets to a new device by following the instructions for recovering an Abra wallet when prompted.

How to use the Abra recovery phrase in four steps

Step one: Get your recovery phrase

Abra recovery phrase: How to get your phraseThe very first step is Abra recovery phrase process is actually documenting and storing your recovery phrase.

This is probably the most important step because if you document the phrase incorrectly, or don’t document it at all, you run the risk of losing access to your Abra wallet and all of the assets in that wallet will be completely inaccessible, including by the Abra team.

You will have two chances to document your Abra recovery phrase. The first time will be when you initially download the Abra app and create a wallet. The second time will be in the form of a reminder after the first few times you open the Abra app.


Step two: Write down your phrase

recovery phraseYour Abra recovery phrase will be a series of 13 words that are randomly generated and map to a 128-bit private Bitcoin key.

Write this recovery phrase down on a piece of paper and store with other important documents. If you lose this recovery phrase you will not be able to access your Abra wallet, and the Abra team will be unable to help you get access to those assets.

Resist the urge to snapshot your recovery phrase and store it on your phone. That’s not a secure practice and you run the risk of having your wallet compromised. Anyone with access to your recovery phrase can also access your wallet.


Step 3: Confirm your recovery phrase

Abra recovery phraseAfter documenting the recovery phrase for the first time, you will have a chance to test it before proceeding.

Make sure you don’t copy and paste the recovery phrase and instead work from the 13 words you have written down and plan to store in a secure location.





Step 4: Recovering your recovery phrase

You can double check your recovery phrase from time to time by looking under the wallet security section of the main menu (in the upper left of the app screen).

Whenever you upgrade devices or want to move your Abra wallet to a new device, you will need to input your recovery phrase to install your wallet and access your funds.


Why Abra’s non-custodial wallet is significant

OK, so we’ve covered the security aspects of non-custodial wallets and what to expect when setting up an Abra wallet and getting a recovery phrase.

But another aspect of Abra’s non-custodial nature is what the technology enables from a scaling perspective.

Abra is available worldwide and is rapidly building a single app that will be able to handle a wide range of financial services — for now, Abra users can send money and invest in a number of different kinds of assets — but in the future, using Abra will be like carrying a full service bank in your pocket.

All this functionality stems from using the Bitcoin blockchain as infrastructure and using the decentralized non-custodial wallet as the interface between Abra users and an entirely new form of finance.

But all of this begins with a few easy first steps. Please remember to write down your recovery phrase, and treat it like you would any other key that unlocks something really valuable.