The Billfodl is a stainless steel device designed to store your recovery phrase.
The recovery phrase is made up of 12, 18, 0r 24 words from the BIP39 word list. This word list contains 2048 words.
For example, the keepkey hardware wallet only uses 12 words. The ledger series of wallets uses 24. Some software wallets sit in the middle with 18 backups words.
You may have noticed that some of these words are up to eight characters long. Why then does the Billfodl only let you backup four letters?
Because you only need the first four letters.Looking at the BIP39 word list will make it easier to understand.
Lets take a look at words #2016: winner and #2017: winter. They share the same first three letters 'win'. But the fourth letter is different.
Now try to compare any other two words on the list. You will find that there are no two words with the same first four letters. All words are unique within the first four letters.
Many times, you will find that letters are unique within the first three letters. Some words, such as #1889: ugly are unique within only one letter.