How do mnemonics encrypt wallet data and what prevents hacking of the algorithm?

For example Blockchain seems to encrypt all data using a mnemonic yet doesn't hold customer data server side.

What prevents creating numerous Blockchain wallets, recording the mnemonics and discovering the algorithm?

NB. The BCI mnemonic recovery protocol is NOT the same as BIP39

  • FYI, I've done some research, and it appears mnemonics at blockchain.info for example work like this: [11 words encoding wallet ID & checksum] + [words encoding passphrase, 1 word per 2 character combination] Aug 19 '14 at 3:31

Edit: Blockchain.info is open source, the algorithm is public. The mnemonic that they use stores information about your wallet id and your password only.

Previous answer: You should read into BIP 39 this covers how mnemonics map to the values that are used to create a HD wallet the algorithm is very well known and corresponds to the size of the key space needed for wallet generation. There are generally 2048 words in the wordlist used to create a wallet. A 12 word seed generates 128 bits of information (and 4 check bits). That's 11 bits per word from a list of 2048 words.

  • Thanks Mark, the question title is ambiguous (I'm changing it now) as I am actually not referring to BIP39 mnemonics, but rather the old (circa 2011-2015) BC.info password recovery mnemonics Mar 15 '16 at 9:54

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