Is it possible to recover lost cryptocurrencies?


It is estimated that tens of billions of dollars in crypto have been lost since the advent of blockchain technology. Many coins have been lost due to human error after crypto users misplaced their wallets or wallet keys.

So, can lost crypto wallets and keys be recovered?

Is it possible to recover a lost cryptocurrency?

Unfortunately, the possibilities of recovering lost crypto wallets and keys are limited. There are two common methods used to recover lost crypto coins.

Illustration of a working hard drive.

There have been many cases of crypto users who have lost their cryptocurrency wallets and keys. The early cryptocurrency miners are among the hardest hit, as many used their personal computers to mine and host their wallets and keys. At the time, many of them had no idea that crypto prices would skyrocket in the future.

It is impossible to say how many crypto wallets and keys have been lost because users simply deleted them, but the number is considered large, with the number of Bitcoins permanently lost or destroyed estimated to be in the millions.

For those looking to regain access to wallets or keys previously stored on their computer hard drives, current data recovery technology can help recreate deleted files, but there is no guarantee that you will get a wallet back. crypto intact.

Data recovery software can help in the process, while there are also specialist companies that use more advanced techniques, but they are quite expensive.

2. Using Cryptohunters

Cryptohunter’s services can help recover lost or stolen keys. Most of them rely on massive processing power to brutally force the right combination of keys into a wallet. Businesses generally require the user to remember some of the lost keys. Even small snippets of seed data dramatically reduce processing time.

It is important to note that most legitimate services ask for a percentage of the stakes as compensation. Illegitimate services, however, are likely to ask for money upfront with no guarantee of results.

Having said that, breaking into a crypto wallet without a partial code is theoretically feasible but practically impossible. Bitcoin wallets, for example, use a SHA-256 RIPEMD-160 Elliptical Curve Digital Signature Algorithm (ECDSA) public hash key.

Breaking this level of encryption (without multiple bits of existing data) requires immense processing power that falls within the realm of quantum computing technology. In a nutshell, in most cases it would be more profitable to just mine the coins using this type of power instead of using it to hack wallets.

How to avoid losing your crypto wallet and keys

Image of crypto wallet, memory card and digital coins.

Preventing the loss of your crypto wallet or keys is the best way to avoid the loss of funds and the associated inconvenience. Here are three ways to avoid losing your encryption keys.

1. Have a secure backup

If you are using a non-custodial crypto wallet, keeping the mnemonic recovery phrase in a secure location will help you regain access if the keys are lost. The seed can be written on a piece of paper and stored in a safe place.

Some people also choose to store their keys as a picture on their computer or mobile phone. This is more convenient but riskier since systems can be hacked, giving hackers access to the seed phrase.

For such backup methods, it is better to choose a device that is not connected to the Internet.

2. Use a custody wallet

A custodial wallet is preferable in cases where a wallet owner considers direct responsibility for the wallet keys to be too risky.

When using a custodial wallet, a third party manages the private keys of the wallet. In most cases, custodian wallets are web-based and therefore are much more convenient than non-custodial wallets. They are usually managed by crypto exchanges.

When choosing the ideal custodial portfolio, it is best to use a regulated exchange. US-regulated exchanges such as Coinbase are generally preferred because they guarantee a proportion of the assets stored against losses caused by direct hacking on the platform.

In the event that a custodian wallet account password is lost, recovery is straightforward and can be implemented via email. Having said that, it is better to strengthen the security of both the email connected to the wallet and the exchange account.

This can be done by implementing a strong and unique password. In addition, it is also advisable to use both SMS-based and app-based two-factor authentication for email address and exchange account.

A YubiKey can be used to further secure the account, especially if you want to thwart hacker schemes such as SIM swapping. A SIM swap attack allows hackers to bypass the 2FA standard by tricking telecommunications networks into transferring ownership of the SIM card to them.

SIM card control allows them to unlock connected crypto accounts.

3. Use a hardware wallet

Ledger hardware portfolio.

Crypto hardware wallets are ideal if you want to have sole control over your crypto holdings. They usually require a pin to unlock the wallet when connected to a computer.

Because they rely on cryptographic hash technology, they are secure against most hacking attacks and malware. They also use a microcontroller for added protection.

This function prevents the transfer of keys away from the device. In addition, since the keys are isolated from the Internet, there is a very low risk that they will be compromised.

That said, crypto hardware wallets are more expensive than web or desktop crypto wallets. Some of them also have complex features that make them difficult for novice users to use.

Popular hardware wallets right now include Trezor and Ledger.

Related: Using Your Raspberry Pi As A Cryptocurrency Hardware Wallet

Keep your cryptocurrency wallet keys safe!

There are several ways to recover crypto keys and wallets, but most of them are not efficient. Part of the reason is that crypto wallets are designed to be secure against hacker attacks using advanced decryption algorithms.

As such, losing a crypto wallet with large holdings is a waking nightmare. It is best to prevent this from happening in the first place.

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