How do I set up a passphrase?

The way to create a BIP 39 wallet is to combine passphrase and seed phrase (12/24 words) to generate a master key. This is used to derive a hierarchical series of private and public keys. With Bitcoin you can do everything you want, including:

• Many characters (infinite in theory)
• Special characters
• Sequence of spaces (two or more spaces back to back)

Bitcoin itself does not have any restrictions on what can be included as a passphrase, but many implementations of the BIP 39 wallet are made. If you run into a passphrase length limit based on wallet implementations such as Trezor, you can allow around 50 characters or other wallets. It is recommended that you check the documentation for the specific wallet you are using before creating PassPhrase. In general, software wallets such as Sparrow and Electrum are less constrained than hardware wallets such as Trezor and Ledger. Also, given that most hardware wallets don’t store passphrases, it might be boring to re-enter 250 or more character passphrases every time you access Bitcoin.

Passphrases provide an extra layer of security that is appealing to taking serious effort to keep Bitcoin safe. That’s because without a passphrase, the attacker won’t be able to access your funds even if he has a seed phrase. It is important to ensure that your passphrase is safe, memorable, and/or stored safely. Because losing it means permanent loss of access to funds tied to the wallet derived from that passphrase. Seed phrases alone are not enough to recover your wallet. As mentioned before, it is a combination of seed phrases and passphrases that create a wallet, so only seed phrases (or different passphrases and different passphrases) create a new (most likely) wallet with different master seeds and different addresses, etc.