Bitcoin Hodler Retrieves Lost Keys thanks to Computer Scientist
April 10, 2020
It is a well-known fact that Bitcoin holders (affectionately known as hodlers) need to be very careful about where they keep their Bitcoin keys. It is estimated that possibly as high as 25% of investors have been locked out of their Bitcoin fortunes because they have forgotten, misplaced, or lost the private key codes needed to access their cryptocurrency.
No one has ever managed to hack a crypto account to date because of the stringent encryption in place to secure the e-currencies. Instead, all loss of e-funds from private accounts can be traced back to human negligence in one way or another.
One lucky investor managed to dodge his own negligent actions and retrieved a few lost keys with the help of a prominent cryptographer, Dr. Mike Stay Ph.D.
An unrevealed Bitcoin buyer bought around $15K worth of the cryptocurrency back in January 2016 and secured his keys in an encrypted zip file, where they could be safeguarded and kept out of the wrong hands.
Unfortunately, after forgetting the password to unzip the folder, the man could no longer retrieve his crypto keys.
Dr Stay was put on the case in a quest to retrieve what was now worth $300K in cryptocurrency. His success in encryption-breaking in the past made him the right man for the job. Within a week, the folder was cracked, and the keys restored to their rightful owner.
Bitcoin Buyers Beware
This article serves as a warning to Bitcoin buyers. Not of the fact that their Bitcoin wallets could be hacked, as this remains an impenetrable feat, but rather as to the importance of safe storage of your crypto keys.
The loss of coinage can be stopped, if people take it more seriously and implement measures that would ensure that they can retrieve their funds successfully when they are needed.
It is vitally important to follow proper guidelines when it comes to the security of cryptocurrency. A lack of concealment could allow your funds to fall foul of criminals, while overzealous security techniques could mean that you rob yourself of your own wealth.
7 Top Tips to Securing Your Keys
- Do not use web wallets as the security of these is fallible.
- Use Separate Cold Wallets (offline hard drive) and do not put all your wealth into one wallet.
- Copy the information onto more than one hard drive as a backup in case something happens to the original.
- Make sure that the hard drives used are dedicated to carrying your cryptocurrency and not used for anything else.
- Store the hard drive in a safety deposit box or a safe, this way the only password/key needed is one that you use daily.
- Should you choose to use an encrypted folder, make sure that you will never forget the password.
- Use a Type 2 Deterministic Wallet. This type of wallet uses a seed to deterministically generate all future private keys or any crypto you purchase or receive. You will then only have to make a backup of the initial seed data because if you lose your wallet, you simply open a new one using the same seed. The lost wallet will then be recreated as it was before.
While there are far more tips to taking care of your crypto investment, we find the top 7 listed above as some of the most user-friendly ways to undertake the task. None of them involve high-tech software and special downloads, which makes them far more appealing to the everyday Joe like you and me.