How can I keep my bitcoin safe and avoid a Bitcoin wallet recovery?
What is Bitcoin?
While Bitcoin has existed for over a decade now, it is still a mystery for a lot of people to wrap their head around. Because Bitcoin rules in the realm of nerds it is also an unexplored area for those of us who aren’t so tech-savvy.
If you have heard about Bitcoin in the media you might have heard it hailed as a new economic system and a new way of life, challenging the existing financial paradigm and power structures that rule the world as we know it. According to experts, and devoted Bitcoin users, these statements are actually true and it is all down to the very nature of Bitcoin and how it is built up.
Where does it come from?
Bitcoin originated in 2008 and was created by Satoshi Nakamoto. To put it simply, which is not that easy when it comes to describing the complexity of Bitcoin, it is an online cryptocurrency which enables its users to make transparent, economic transfers directly between two parties without involving a third party in the process. The transactions take place through the blockchain: a public ledger. This makes Bitcoin an appealingly decentralised financial system in comparison to highly centralised systems where banks play a key role as the third party. Completely separate from central banks, Bitcoin is also protected from political imbalance and shifts in power. Bitcoin transactions are protected by two keys, one public key and one key that is private for each individual user. Without the private key it is impossible to spend or transfer Bitcoins. After having purchased the Bitcoins, every user needs to safely store their own coins. This is where a Bitcoin Wallet comes in. A Bitcoin wallet is usually the safest and most common way to keep those precious coins secure.
So if you are going to get nerdy and invest in this valuable and revolutionary cryptocurrency you’re going to need a Bitcoin wallet. In this text we’ll go through what a Bitcoin wallet is, what happens if you lose your Bitcoin wallet and how to safely and successfully do a Bitcoin wallet recovery.
What is a Bitcoin wallet and why do you need one?
It is important to keep Bitcoins safe, and they are only as safe as the user makes them. While not recommended, some people settle with the exchange storage which is offered to users during the transactions to keep their coins protected. This means that the safety of your Bitcoins depend entirely on the exchange’s security infrastructure. In order to control the safety of your own coins, a Bitcoin wallet is the best option. Every individual user that has a Bitcoin wallet manages their own coins. Through the Bitcoin wallet, the user can both send and receive bitcoins to and from anywhere around the world. The wallet indicates a form of ownership of the bitcoins that are “stored” in there, this is essentially the balance. The inverted commas are used to highlight the fact that the bitcoins aren’t stored in the digital wallet in the same way that physical money is stored in a physical wallet. Confusing, right? Let’s break it down.
The digital wallet
As Bitcoins don’t exist in any physical shape or form it’s not possible to technically store the Bitcoins. And as a Bitcoin user you don’t actually own the bitcoins themselves. The user instead owns the combination of a set of keys that are stored in the wallet, keys that give access to each Bitcoin, enabling transactions of that specific coin. In order to access your personal Bitcoin wallet, or digital wallet as it is referred to sometimes, you need your private key and at least one public key. And as you’ve probably already guessed, the wallet itself is not really a wallet at all. You won’t be putting it in your backpocket or throwing it in your handbag. We’ll dive deeper into this in the next section but the most important thing to know about Bitcoin wallets is that they are divided into two main groups, those that are offline, called cold wallets and those that are online, known as hot wallets. Cold wallets are generally the safer option, as they are more difficult for hackers to reach. These five wallets are the most common types among Bitcoin users today:
Which is the best Bitcoin wallet for me?
When choosing which Bitcoin wallet to use, there are a number of considerations and a few trade-offs to take into account before making a final decision on which one to entrust with your bitcoins. Factors include the size of the wallet that you’ll need depending on the number of coins that the wallet needs to be able to “store”, how often the wallet will be used and which variable you prioritise higher: a convenient usage or tighter security measures. Here, let’s get down and dorky with a brief overview of the five most common wallets used today..
The paper wallet is a cold type of Bitcoin wallet, and as the name suggests this wallet is a printed document. The printed document contains the necessary keys. It holds the public key, or address, which makes it possible to receive bitcoins and it holds the private key which enables the user to spend its coins. In order to make the wallet as accessible as possible, the keys are often printed as a QR-code, which is only a scan away from being activated. However, before the bitcoins in the paper wallet can be transferred they first need to be moved into a software wallet. A paper wallet is one of the safest options because the document is completely immune to online hackers. Caution needs to be taken, though, when creating the wallet and a clean operating system is therefore recommended for this step. And, needless to say, how you store the physical piece of paper is crucial for the ultimate security of the Bitcoins.
The hardware wallet is another type of cold wallet and it is actually the safest option for storing Bitcoins, no matter the amount. The Bitcoins are stored directly on a hardware device. It differs from the paper wallet because it doesn’t need to be imported to a software wallet before the coins can be used for transaction, which is one of the reasons why hardware wallets are so safe. In addition, the hardware wallet can be used offline while connected to a website. With hardware wallets, caution primarily needs to be taken when buying the hardware device. The device for a hardware wallet should only be bought from a trusted and well-known manufacturer.
The web wallet is a hot wallet. Hot wallets are always connected to the internet, and are thereby a less secure but more convenient option than cold wallets. This is why web wallets should only be used for storing small amounts of Bitcoins and if the user needs to make transactions on a more regular basis. The web wallet functions via a browser and enables the user to make instant transactions as long as the user is connected to the internet. The web wallet is considered one of the riskiest options of all the wallets, mainly because your Bitcoins’ safety depends on a third party. You see, the Bitcoins are deposited into a service provider’s online wallet. In some cases, these web wallet clients also hold the private keys for their users which means that they have complete control over the security of the coins. In turn, if the service provider is hit by a hacker attack, your Bitcoins may be lost forever.
The desktop wallet is downloaded to the user’s hard drive, and is sometimes also called a software wallet. Although the desktop wallet is hot, it’s safer than the web wallet as no third party is involved or entrusted with the keys of the coins. However, since it is stored on the user’s hard drive it is also less accessible than the web wallet since it can’t be reached from anywhere with an internet connection. This wallet is a good choice for the kind of user that makes a lot of small transactions directly from their own computer.
The mobile wallet is popular among on-the-go Bitcoin users who use Bitcoins on a daily basis when going shopping or doing face-to-face trading. It is by far the most accessible type of wallet, as the private keys are stored in an app on the users smartphone and can be reached from anywhere, anytime. Of course, the mobile wallet is also one of the least secure options because it’s very prone to attacks by hackers and as many of us have had the misfortune to discover, it is all too easy to lose a phone and with it, your mobile wallet.
How do I keep my Bitcoin wallet safe?
Once you have chosen one or more Bitcoin wallets to ‘store’ your bitcoins, it’s time to take any necessary precaution to keep those wallets safe. Bitcoin wallets are a prime target for online hackers and, like we discussed in the previous section, some are more prone to techy crime than others. Not taking the necessary steps to protect the wallet can mean that you end up losing a lot of Bitcoins So how do you avoid losing a whole lot of money? Simply treat your Bitcoin wallet the same way you would treat your physical wallet. Here, we list five of the most important things to consider when keeping your Bitcoin wallet safe and to avoid losing the wallet and having to do a Bitcoin wallet recovery.
- The first step towards securing your bitcoins is to choose a safe Bitcoin wallet. We’ve already given you the tools you need to make that decision. As noted, the hardware wallet is by far the most secure type of wallet. A smart idea is to use the hardware wallet for larger amounts of coins just like you would use a savings account at a regular bank. A less secure but easily accessible wallet can be used for smaller amounts of coins that you need to access on a daily basis.
- Encrypt the wallet! Make sure to choose a very strong password when encrypting your wallet. The password should contain a minimum of 16 characters, including letters, numbers and punctuation marks. To be as safe as possible, the password should not be recognisable or used for any other website or service.
- Never ever share the private key with anyone. The private key is a 256-bit long, random number that is generated when the user creates a wallet. Giving away your personal key could, in the worst case scenario, be the same as giving away your Bitcoins.
- Always backup your wallet on a regular basis. This can protect you in the dreaded case of a lost wallet. If the backup is online, make sure you encrypt the copy to prevent any hackers from reaching it.
- Only ever use safe and secure internet connections when dealing with your Bitcoin wallets and private keys, and avoid public networks wherever possible.
I lost my Bitcoin wallet, now what?
There is a finite amount of Bitcoins in the world, 21 million. This means that when Bitcoins are lost the global supply of Bitcoins decreases. When the Bitcoins are stolen, (often by hackers) the Bitcoins don’t count as lost since the thieves will most likely be using the coins. By not being careful or taking the necessary precautions, Bitcoins can be lost in a number of ways. If the Bitcoins are stored on a device, the coins will be lost if that device gets thrown away or destroyed. This may seem unlikely, but there have been cases where people simply forget that they have Bitcoins stored on that unit. This happened a lot in the early years of cryptocurrencies, since they were worth a lot less money back then. Bitcoins can also be lost by sending them to an incorrect address, which is similar to sending a package to an empty house. Moreover, bitcoins are also lost when users forget or lose their private keys and/or passwords.
What can you do if you forget your Bitcoin wallet password?
Although the password of a Bitcoin wallet has similarities to the password of an email account, there is a very big and important difference; a Bitcoin wallet password can not be reset. This is to make the Bitcoins as safe as possible, since resetting passwords often compromises the security. It wasn’t until recently that it was pretty much impossible to recover lost Bitcoins. Today, there are ways to recover lost Bitcoins but whether it will be possible depends on how the coins were lost. For example, if the Bitcoins were stored in a hardware wallet and that device gets destroyed, it is still impossible to recover the Bitcoins. When it comes to other types of wallets, recovery success varies. When setting up your Bitcoin wallet, you should also have set up a back-up phrase consisting of 12 random words. This back-up phrase is likely to play a key role in your Bitcoin wallet recovery.
How do I do a Bitcoin wallet recovery?
If, after having read this post, you still find yourself in the haze of how Bitcoins work and how to recover your digital wallet – please don’t hesitate to contact us for assistance! We’d be more than happy to share our technical expertise with you and help recover your lost Bitcoins. Through lots of hard work, we have developed a special, safe software that can recover lost Bitcoin passwords. The process is simple:
- Through an initial conversation, which can be encrypted upon the request of the client, we discuss the problem and how we can offer our help.
- Following the interview, the client signs a legal document which gives them the right to hold our company responsible for any unauthorised activity on their wallet address. We also sign off on agreed payment and timelines.
- We initiate the recovery process, during which we send the client progress updates.
- As soon as our software program recovers the Bitcoin wallet password, the client will be notified immediately. Sooner than you know it you’ll have access to your recovered Bitcoins again.
- After we have successfully recovered the wallet password, the client makes the payment. The price of our service is 20% of the recovered wallet’s value. If we are unsuccessful in recovering the password, the client pays us nothing.