A brain wallet refers to the concept of memorizing a private key or seed phrase for a cryptocurrency wallet.
A brain wallet is a concept in the cryptocurrency world where a user memorizes their private key or a seed phrase to a cryptocurrency wallet in their brain, instead of writing it down or storing it digitally. The private key or seed phrase is usually transformed into a more memorable format, such as a series of words, to make it easier to remember. While the concept of a brain wallet might sound secure, as it leaves no digital trace, it is actually considered risky. If a user forgets their private key or seed phrase, they would lose access to their cryptocurrency wallet and any funds stored within it. Additionally, brain wallets that use predictable or weak passphrase can be susceptible to brute force attacks. From an accounting perspective, the use of a brain wallet could present unique challenges, as it would be difficult to prove ownership or provide a record of the private key or seed phrase for audit purposes.
Remembering a 12-word mnemonic phrase to generate a Bitcoin wallet.