Textile uses a hierarchical deterministic (HD) wallet to derive account keys from a set of unique words, called a mnemonic phrase.
Every account seed "inside" the wallet can be derived from this mnemonic phrase. Meaning that the wallet effectively is the mnemonic phrase. Any given wallet may create an arbitrary number of accounts. For example, a single wallet can be used to provision multiple Textile Photos "accounts", each with a completely different persona. This provides a powerful partitioning framework.
Textile account seeds (private keys) always starts with an "S" for "secret" and account addresses (public keys) always start with a "P" for "public".
Peer initialization does not (by design) use the whole wallet, just one account seed. Users and applications are free to use any seed from their wallet, but most use cases will just make use of the seed from the default account, or account 0.
This BIP39 mnemonic explorer can be helpful when learning about HD wallets: https://iancoleman.io/bip39/.
See the daemon installation section for a guide to generating a wallet with the command-line client.
Generating and interacting with a wallet are capabilities separate from the core peer API. Below is a list of clients that are currently able to generate and interact with wallets.
Account seeds and their public addresses are generated via the wallet pass-phrase. Textile uses ed25519 keys because they provide fast key generation, signing, and verification. These properties become important on less powerful devices like phones.
Peers that are backed by the same account are called account peers. Account peers will automatically stay in sync. They are able to instruct one another to create and delete threads. Additionally, they will continuously search the network for each other's encrypted thread snapshots (metadata and the latest update hash, usually stored by cafes). Learn how search works here.
Thread snapshots also enable logins from new devices, as the new peer just needs to search for snapshots created by its account.
Every peer has in internal account thread, which is used to track account peers, profile information, and known contacts. Read more about account threads here.