Looking at past occurrences, losing access to cryptocurrency is just as easy as ABC

Suppose you misplace your keys or they go missing, leaving you outside your car or home. In this unpleasant yet common situation, you have hundreds of locksmiths to call to solve the issue. However, the same cannot be said about cryptocurrency wallets, Bitcoin, Ethereum, and everything in between. Having your passcodes lost translates to vanished cryptocurrency and close to zero means of redeeming them, recouping the initial investment, or minimizing the loss in any imaginable way.

You can invest in Ethereum, Bitcoin, and all the other cryptocurrencies, use public-key cryptography or an algorithm that employs key pairs. Despite the name held by the designed property, keys are publicly known and fundamental when trying to log in and use the crypto. Similarly, there are also private keys that are confidential and employed in encryption and authentication. Losing your keys means you will be denied access when the ETH price explodes, and you want to cash in on it, make a trade, purchase something, or conduct any other task you deem suitable.

Losing access to keys is not extraordinary; many people have gone through this mishap, some of whom lost substantial amounts of money, as you’ll see. However, there are ways and mistakes that are more prevalent than others and lead to losing access to crypto coins, with some situations that might sound like humoristic drama happening even to the best of us.

Sometimes, losing the keys is just as effortless as pronouncing it.

The hardest to forget piece of information that will likely serve as both a reality check and a reminder never to follow the same path will be laid in the following sentences. A once-wealthy Bitcoin crypto miner has gathered 7,500 Bitcoin by 2013 through this practice, so far seeming like many other participants in the industry. However, instead of cashing in on them and seeing future generations thrive on his fortune, he simply saw all his work go down the drain the day he cleaned his house and accidentally threw out the assets that would today be worth billions. They got transported to the landfill and burned, leaving the miners with zero profits on the losses and, probably, plenty of wasted capital.

Contrary to what one may think, having the slightest chance of getting a piece of hardware back from the landfill is impossible. Thousands of tons of waste exist and are continuously added in these places, meaning that a dangerously high amount of energy and labor work would be consumed, inevitably impacting the environment exponentially. The only thing one can do when storing cryptocurrency on hardware is to ensure there’s no chance of having their electronic component lost, destroyed, misplaced, exposed to harmful conditions and anything that may impede access to the owned assets.

Situations like these are possible and shared, and it all depends on every proprietor to manage their wealth safely and correctly. Remember this unforgettable mishap, and don’t ever take your fortune for granted, for it sometimes takes a few seconds to see a long-worked-for fortune vanish. Many other unlucky previous owners can attest to this.

Are cryptos held on dedicated exchanges safer than when managed individually?

As more and more people learn the possibilities of creating passive income with crypto and turning parts of their wealth into crypto, the concept of storing the funds safely draws considerably more attention. Cryptocurrency exchanges offered by large crypto management companies know that keeping their users loyal and happy comes at the cost of continuously upgrading the storage security measures presented and giving insurance policies for when mishaps happen. Generally, this method is the easiest to use when you don’t want to be responsible for holding your keys or find the process complicated and expensive. A reliable crypto platform will have your back and assets, storing them in cold wallets outside the system and the wealth of other utilizers.

This method is secure because inviting a third party into the equation means you can use their extensive and overdeveloped security tools. However, it’s important to remember that crypto exchanges are the most eyed by cyber criminals because there’s more at stake than a wallet with funds worth a few bucks.

Generally, the UK and US regulations for crypto exchanges are the best and most oriented toward the owners’ safety, making them where confidence in crypto hot wallet usage thrives. Yet, since they can be attacked, it’s safe to say that you have your part of duty to do, such as creating impossible passcodes.

The main common ways people lose access to their cryptocurrencies

For educational purposes, it’s helpful to take in some examples of how most people are deprived of access to their cryptos.

• Poor private key storage and viruses are some of the quickest routes to crypto bankruptcy, as the higher public exposure your keys are subjected to, the bigger the likelihood of having a clever hacker steal your wealth. Storing the recovery seed on a word or text file may seem appealing, but it’s actually one of the worst moves you can make because a specific type of malware was invented to inspect files in computers and find the 12–24-word seed.
• Another shortcut to going broke is to lose the recovery seed itself, as it’s the primary way to enter your crypto wallet when you misplace your mobile device or unintentionally delete the wallet app. Simply, recovery seeds that aren’t backed up and get lost translate to an amount of crypto potentially disappearing forever.
• Exchanges and exchange accounts attract plenty of hackers, given the pseudo-anonymous character of most cryptos out there. A hacked exchange or account means the cryptos might be lost for good because you can only track down the addresses that receive your assets but not the recipients’ names. Therefore, hackers are likely to escape with their actions whatsoever.
• Phishing sites, or the illness of today’s online space, are common in the crypto ecosystem and are some of the most effective forms of stealing digital coins. These are scam websites whose links are sent to people hoping to have them click on the URLs, transforming them into victims if the attempt is successful. Make sure to always triple-check the legitimacy of the website you’re accessing and using, and never give away crucial data that can jeopardize the safety of yourself and your wallet.

Storing Bitcoin, Ethereum, and other cryptocurrencies is no child’s play, so treat the topic carefully to reap the advantages and see your wallet expand the moment the bull appears.