Even though Bitcoins are circulated in the digital realm, they can still be lost. But how can that happen? Are they retrievable and how can you prevent this from happening? Find the answers to these questions here in Casino Days India!
What are lost Bitcoins?
When a digital or physical wallet can no longer be used to access Bitcoins, those Bitcoins are considered lost. They are often misplaced as a consequence of unlucky occurrences such as the death of their owner or the failure of their technological devices. When the private key connected with a coin is misplaced, stolen or made unusable in any other way, the coin then becomes lost.
According to research published in 2017, the number of lost Bitcoins is between 2.78 and 3.79 million, which means around 20% of the current supply is lost permanently.
How do Bitcoins become lost?
Although there are many potential causes, some are more common than others when it comes to the loss of Bitcoins. The most common ways Bitcoins are misplaced are as follows:
Forsaken by owners
When Bitcoin first came out in 2009, a lot of people were intrigued by its potential. Many started mining these precious tokens and storing them in different external drives and flash drives. However, Bitcoin’s success only came years after. When this happened, a lot of people already lost the said drives and forgot where they hid them.
A great example of this is James Howells who threw his hard drive after not using it for three years. Unfortunately, the password for his virtual wallet is located on the said drive. He went back to the landfill, only to see that the device had already been compressed and broken.
He lost around 10,000 BTC, which he bought in 2010, and is currently valued at $300 million.
Transferred to an incorrect address
Most crypto exchanges give you complete custodian control over your digital assets so you have the liberty to receive and send tokens to anyone and anywhere. However, this comes with the risk of sending to an incorrect wallet address and when this happens, it’s hard or impossible to recover your funds since these addresses are not named.
One way to avoid this from happening is using a QR code when transferring, instead of typing every detail to avoid any type of mistake.
Lost seed phrase
A seed phrase is a series of 12 to 24 simple randomised words generated by your crypto wallet when you first set it up. This is a vital component since it can help you regain access to your wallet if you lose your mobile wallet or break your hardware drive.
Through a seed phrase, you can get the chance to reclaim full control of your cryptocurrency by creating a new wallet on a smartphone, web browser or hardware device.
Just like with social media accounts, it’s vital to remember your password to online wallets. However, there are unfortunate circumstances when one forgets the password they placed when they set up their crypto wallet.
A great example of this is Stefan Thomas who was paid 7,002 BTC for work he did in a technology company. He kept all the tokens in a digital wallet, however, he forgot his password.
But before that incident, he stored his password in an Ironkey, an encrypted flash drive that only gives you 10 tries to access it. As of writing, he only has 2 chances left of accessing his lost BTCs. Currently, his lost Bitcoins are worth $265 million.
Are lost Bitcoins retrievable?
Retrieving lost Bitcoins can be possible depending on the case. But if they’re stored in an external drive that has become corrupted over time, it may be harder or even impossible. However, some companies offer retrieval solutions like Crypto Asset Recovery.
Crypto Asset Recovery is a company that has been helping numerous people recover their lost Bitcoins since 2017 by asking them questions like their birthdate, phone number, anniversary and more to get a general idea of their password.
Once they get all the information they need, they run it through their system in hopes of getting the correct password and regaining the clients’ data and crypto accounts.
However, this process only works if the user was able to store the coins in a bigger system, since the company’s retrieving system may not work once the coins are stored in external drives that are corrupted and broken.
How to prevent losing Bitcoins?
Although it’s easy to lose your crypto just like any other item, there are still ways to prevent it. Check them all out below:
Get a secure wallet
In essence, Bitcoin is hard to hack. However, the reason why many people experience fraud is that they don’t store it in secure wallets. There are two kinds of wallets where you can keep your tokens, hot or cold wallets.
A hot wallet is located digitally and can be accessed using the internet. It’s accessible and more convenient to use but also more susceptible to hacks. But you can always protect yourself from this by doing ample research and choosing a reputable platform.
On the other hand, a cold wallet is a piece of hardware that can be bought in various stores. Through this drive, you can set up a password and a seed phrase to secure your tokens. Just keep in mind to remember these log-in credentials.
Use a reputable exchange
When browsing the internet, you’ll find random advertisements asking you to access their site to buy, sell, store and invest in crypto. However, you always have to gauge whether the advertised platform is reputable and can be trusted.
It’s best to only access crypto platforms that are known by many and have a good reputation. Some of the best exchanges you can use are Coinbase, Gemini and Binance.
Research more about crypto
Due to the various developments made in the crypto realm, it’s always a good idea to keep on researching crypto, regardless if you’re a beginner or not. Through this, you can avoid any type of major mistakes due to uninformed decisions.
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