How does a seed phrase wallet work?
A traditional crypto wallet is one secret key, written out as 12 or 24 words. Whoever has those words controls the money, on any device, forever. That is simple and portable, but it puts all the risk on one piece of paper or one screenshot.
The losses are real. Chainalysis counted about 158,000 personal wallet compromises in 2025, with $713 million stolen from at least 80,000 people. Many start with a fake website or message that tricks the owner into typing their words or signing something they did not understand.
What is a passkey?
A passkey is a sign-in key built on the FIDO and WebAuthn standards, the same technology behind passwordless sign-in at Apple, Google and Microsoft. The private part stays on your device or in your passkey manager; you approve each use with Face ID, a fingerprint or your passcode, and the key itself is never shown to anyone (FIDO Alliance).
Two properties matter for money. A passkey is tied to the app or website that created it, so a look-alike phishing site cannot use it. And passkey managers such as iCloud Keychain sync it across your devices with end-to-end encryption (Apple).
Passkeys also simply work better. The FIDO Passkey Index, published in October 2025, found that sign-ins with passkeys succeeded 93% of the time, against 63% for other methods, and were 73% faster. Those figures are for website sign-in, but the experience carries over to approving a payment.
How can a passkey control a crypto wallet?
Through a smart account. Instead of a wallet that is one key, a smart account is a small program on the blockchain that decides who may approve a transfer. That rule can be "this passkey", "this second passkey" or "this recovery phrase". The standard most smart accounts use, ERC-4337, went live on Ethereum in March 2023, and tens of millions of smart accounts have been created since, according to BundleBear.
Checking a passkey signature on the blockchain used to be expensive. That changed when networks added a built-in check for the type of signature passkeys use. Rollups adopted it as RIP-7212, and Ethereum itself added it as EIP-7951 in the Fusaka upgrade on 3 December 2025 (ethereum.org). Coinbase Smart Wallet (CoinDesk) and Safe are well-known wallets that use passkeys this way.
Passkey wallet vs seed phrase wallet: how do they compare?
Side by side, on the points that matter day to day:
| Compared on | Seed phrase wallet | Passkey smart wallet |
|---|---|---|
| What you must protect | 12 or 24 words | Your device and your passkey manager account |
| How you approve a payment | Unlock the app, then confirm | Face ID, fingerprint or device passcode |
| Phishing | Words can be typed into a fake site | Passkey only works with the app that created it |
| If you lose your phone | Restore from the words | Synced passkey, a second passkey, or a recovery phrase |
| If the secret leaks | The wallet can be emptied | There is no secret to leak; recovery options can be changed |
| Setup cost | None | A one-time network fee to set up the account on each network |
| Who holds the funds | You | You |
What are the trade-offs of a passkey wallet?
Passkey wallets remove the biggest everyday risk, but they are not magic:
- Your passkey manager account matters. A synced passkey is as safe as the Apple or Google account that syncs it, so protect that account with a strong password and two-step verification.
- Switching ecosystems takes a step. Passkeys sync within Apple or within Google. Moving from iPhone to Android means adding a new passkey from a device you already use.
- Each network has a setup. A smart account is set up separately on each network, which costs a one-time network fee.
- Some older apps expect a classic wallet. Most modern apps support smart accounts, but a few older ones only understand single-key wallets.
Do you still need a recovery phrase with a passkey wallet?
You do not have to, but you should have more than one way back in. A good setup combines a synced passkey, a second passkey on another device, and optionally a recovery phrase kept offline. If you lose every passkey and have no phrase, nobody can recover the wallet, because a non-custodial wallet has no company holding a spare key.
The InfraIO Wallet works this way: it is a smart account controlled by passkeys, the recovery phrase is optional and created on your device, and InfraIO Pay never holds a key that can move your funds. How the InfraIO Wallet works explains each recovery option in detail.
Keep reading: How crypto wallets get hacked, What is a multisig wallet?, How to use InfraIO Wallet, InfraIO Wallet