What is a mnemonic phrase?

A mnemonic phrase, or a passphrase, is a form of private key. It was first proposed by BIP39 to help users remember complicated private key strings. Mnemonic phrases are typically a collection of 12, 15, 18, or 21 words. These words are all taken from a fixed collection, and the generation order is also based on an algorithm.

If anyone gets hold of your mnemonic phrase, enters it into a wallet, and sets a password (they do not have to have your original password), they can enter your wallet and have full control over it, compromising your digital assets.

After creating your wallet, you must backup your mnemonic phrase as you will only have that chance to back it up. After this your wallet will never display your mnemonic phrase, so make sure you back it up and keep it safe!