It is estimated that tens of billions of dollars in cryptocurrency have been lost since the advent of blockchain technology. Many coins were lost due to human error after cryptocurrency users lost their wallets or keys.
So, is it possible to recover lost cryptographic wallets and keys?
Is it possible to recover lost cryptocurrencies?
Unfortunately, there are limited possibilities when it comes to recovering lost cryptographic wallets and keys. There are two common methods used to recover lost cryptocurrencies.
There have been many cases where cryptocurrency users have lost their wallets and keys. Early cryptocurrency miners are among the hardest hit as many have used their personal computers to mine and host their wallets and keys. At the time, many of them had no idea that cryptocurrency prices would rise in the future.
It is impossible to know how many wallets and crypto keys are lost because users simply delete them, but the number is significant, as the number of bitcoins lost or permanently destroyed is estimated to be in the millions.
For those looking to regain access to wallets or keys previously stored on their computers hard drives, current data recovery technology can help in recreating deleted files, but there is no guarantee that you will recover a healthy crypto wallet.
Data recovery software can help with this process, while there are also specialized companies that use more advanced technologies – but they are very expensive.
2. Using Cryptohunters
Cryptohunter services can help in recovering lost or stolen keys. Most of them rely on massive processing power to force the correct set of keys on the wallet. Companies usually require the user to remember part of the lost keys. Even small snippets of seed data drastically reduce processing time.
It is important to note that most legitimate services require a percentage of holdings as compensation. However, illicit services are more likely to ask for money up front without guaranteed results.
However, breaking into a crypto wallet without a partial token is theoretically possible but almost impossible in practice. Bitcoin wallets, for example, use the SHA-256 RIPEMD-160 hash key for the Digital Signature Algorithm (ECDSA).
Breaking this level of encryption (without several pieces of data present) requires enormous processing power in the world of quantum computing technology. In short, it would be profitable, in most cases, to just mine coins with this kind of power rather than using it to hack wallets.
How to avoid losing your crypto wallet and keys
Preventing the loss of your crypto wallet or keys is the best way to prevent loss of funds and related inconveniences. Here are three ways you can avoid losing your encryption keys.
1. Get a secure backup
If you are using a non-secure encrypted wallet, keeping the recovery phrase to memory in a safe place will help restore access if keys are lost. Seeds can be written on a piece of paper and kept in a safe place.
Some people also choose to store their keys in the form of an image on their computers or mobile phone. This is more convenient but more risky given that systems can be compromised, giving hackers access to the raw gateway.
For these protection methods, it is better to choose a device that is not connected to the Internet.
2. Use a wallet
The use of a protective wallet is preferable in cases where the owner of the wallet considers the direct responsibility for the keys of the wallet to be too risky.
When using a custodian wallet, a third party manages the private keys of the wallet. In most cases, custodial wallets are web-based and therefore more convenient than non-custodial wallets. They are usually managed by cryptocurrency exchanges.
When choosing the perfect portfolio wallet, it is best to use a regulated exchange. US regulated exchanges such as Coinbase are usually preferred because they guarantee a percentage of the assets stored against losses from direct platform penetration.
In the event that the password for the custodian wallet account is lost, recovery is simple and can be carried out via email. However, it is better to enhance the security of both the email connected to the wallet and the exchange account.
This can be done by applying a strong and unique password. Moreover, it is also recommended to use both SMS and app-based two-factor authentication for the email address and the exchange account.
The YubiKey can be used to secure the account further, especially if you want to thwart hackers’ schemes like SIM swapping. The SIM swap attack enables hackers to bypass the 2FA standard by tricking telecom networks into transferring SIM ownership to them.
SIM control allows them to open connected crypto accounts.
3. Use a hardware wallet
Crypto hardware wallets are ideal if you want to individually control your crypto holdings. It usually requires a pin to open the wallet once it’s connected to a computer.
Since they rely on cryptographic hashing technology, they are secure against most hacking and malware attacks. It also uses a microcontroller to enhance protection.
This feature prevents keys from being moved away from the device. In addition, since the keys are isolated from the Internet, there is very little risk of them being hacked.
However, crypto hardware wallets are more expensive when compared to web or desktop crypto wallets. Some of them also have complex features that make it difficult to use for first time users.
Currently popular hardware wallets include Trezor and Ledger.
Keep your cryptocurrency wallet keys safe!
There are several ways to recover cryptographic keys and wallets, but most of them are ineffective. 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 nightmare. It’s best to prevent this from happening in the first place.
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