Bitcoin has soared in value over the past decade, making many millionaires, but other holders of the world's largest cryptocurrency have missed out on the opportunity. why? One of the main reasons is that you can no longer access your account. In fact, it is estimated that more than $100 billion in Bitcoin has been lost, although at least one company says some of it can be recovered.
A 2020 report by forensics firm Chaineries estimated that approximately 3.7 million Bitcoins were lost. This is out of a total of approximately 19.6 million tokens currently in existence, the maximum supply if Bitcoin is fully mined is 21 million tokens. At the high end, about 19 percent of today's supply could be permanently lost. Or is it?
Traders who lost access to Bitcoin and other digital currencies and assets may be able to recover them with the help of at least one tech company.
Bitcoin may be recoverable
Bitcoin's vaunted security cuts both ways, preventing bad guys from getting their hands on your stash, but it often also prevents you from getting their hands on it yourself.
One of the most touted aspects of Bitcoin and other cryptocurrencies is its security. Not only is it nearly impossible to counterfeit, the transaction is nearly irreversible. Once someone gets your Bitcoin, they own it forever. A similar situation exists if you forget your password, throw it away as part of a move, or throw away the hard drive containing your coins.
But Chris and Charlie Brooks, father and son founders of CryptoAssetRecovery.com, have been recovering Bitcoin and other digital assets for people who have lost their passwords since 2017, despite high security.
“Of the approximately 20% of lost coins, we estimate that approximately 2.5% can still be recovered,” says Chris Brooks. He said the figure stands at $4 billion in recoverable assets, with Bitcoin trading at nearly $44,000.
Of course, not all digital assets can be recovered. A damaged or discarded hard drive may be lost forever. However, Crypto Asset Recovery has a fair chance of getting back your lost loot if you had the encrypted private key but forgot the password, or if you had a failed hard drive that contained the private key. It says that there is a sex.
However, even if you have your wallet and are able to pry it open, there's a good chance there's no change in it at all. Former Bitcoin owners who dabbled in Bitcoin years ago may have simply been hoping that some long-lost treasure was still on that old hard drive, but they're not sure. , I might have decided to check it out just to be sure.
According to Chris and Charlie, “about half of the wallets we split were empty.”
How to retrieve trapped cryptocurrencies from locked digital wallets
All kinds of digital assets can be trapped somewhere on your hard drive, such as Bitcoin, Ethereum, Dogecoin, or other popular cryptocurrencies. But NFTs, or non-fungible tokens, such as digital art, collectibles, and music are also increasingly being locked up. All of these are potentially recoverable.
Crypto Asset Recovery’s typical success stories include “early Bitcoin adopters with blockchain crypto wallets,” says Charlie Brooks. These wallets are more than half what they seem. Early enthusiasts may have purchased a few coins and then forgotten about them. However, single Bitcoins now trade at high prices, and even just a few coins can lead to big profits.
Once contacted, Crypto Asset Recovery will consult with the customer, seek the best guess for the password, and begin work. Even if you only know part of your password, or even a general idea of it, your chances of gaining access to your lost crypto assets are significantly increased.
From there, the team will attempt to “brute force” your account, trying all sorts of potential passwords based on your suggestions.
“By the time you get a password, you might run through tens or hundreds of billions of password variations, or decide it's not worth investing any more computational resources,” says Chris Brooks. .
Beware of scammers advertising asset recovery services
Given the sensitivity of your work, you may need to trust your asset recovery company to provide you with passwords for encrypted accounts that you may also use elsewhere.
The promise of access to lost Bitcoins may make even the most cynical owners let their guard down against someone who promises to help them recover their money. That's easy to do when you have potentially hundreds of thousands or even millions of dollars locked up in a digital wallet somewhere.
However, authorities are warning consumers to be careful about the asset recovery companies they hire. Many supposed companies are simply scammers who will access your account and take your earnings with them if they can access your account. They may ask for an upfront fee to do the work with the promise that you will eventually get your hands on the cryptocurrency and walk away with that cash.
According to the Commodity Futures Trading Commission (CFTC), this scam is extremely sophisticated. Scammers may also issue press releases or fake testimonials promising asset recovery services.
Officials have pointed out several red flags that consumers should be aware of.
- Fees will be billed before services are provided.
- Company physical address not provided or located outside of the United States
- This company does not have a phone number and asks you to contact them through a chat app.
- The company will ask for your bank account details in order to deposit the recovered money there.
These are some of the most important signs, but the CFTC also offers other warning signs and tips to stay safe.
3 common ways crypto traders lose access to their coins
Cryptocurrencies have become extremely popular over the past few years and have become a trendy means of trading for many young people who are new to investing. A 2021 Bankrate survey found that nearly half of millennial Americans are at least somewhat satisfied with owning cryptocurrencies. However, regardless of age, crypto traders may not be familiar with the various ways these digital assets can be held, and could find themselves locked out of their accounts.
Cryptocurrency owners can lose access to their assets in a variety of ways, but here are some of the biggest.
1. Not fully understanding how custody works
Unlike traditional assets such as stocks and bonds, which are always held at a brokerage firm, cryptocurrencies can be held directly by the owner using a cryptocurrency wallet, or by a trading company on your behalf. Masu. However, this difference is very important for recovering assets.
If your company stores digital assets, you can use that system to regain access to your assets. In this respect, they are similar to traditional investment companies. Once you verify your identity, the company will reset your password and you will be ready to take the exam again.
But when you manage your digital assets yourself, you don't have that luxury. Unfortunately, many people new to cryptocurrencies do not understand when their assets are stored and the responsibilities that come with it. To access your self-custodial assets, you will need a seed phrase, which is a collection of 12 to 24 words generated by your crypto wallet.
Due to the potential risks of holding assets on your own, Chris and Charlie Brooks strongly recommend that anyone new to cryptocurrencies sign up for a custodial wallet. Custodial wallets allow you to contact trading companies and access your cryptocurrencies with relative ease.
“Understand what it takes to manage a Bitcoin wallet before you actually get started,” says Charlie.
2. Lose your seed phrase
Charlie says people misunderstand the risks of cryptocurrencies. “For most people, the far more likely risk is losing your seed phrase, not having it stolen by a hacker. Of course that happens.”
“The biggest misconception that gets people into trouble is not understanding that the seed phrase represents the private key,” says Chris Brooks. “If you lose it, you're in trouble.” Many people don't realize that seed phrases are so important, he says.
The seed phrase unlocks the wallet and all cryptocurrencies within it. Therefore, it is important to maintain access to this seed phrase. “It's not like a bank account where you can reset your password,” he says.
They say it's common to lose your seed phrase when moving, but there's a simple solution.
“Buy a $30 safe on Amazon and save your seed phrases there,” Charlie says. “You need a place to store it so no one thinks, 'I have to throw this away.'”
3. Self-sabotage
“One of the biggest hurdles we face is self-sabotage by our clients,” Chris says.
Self-sabotage occurs when people try to solve problems on their own, only to end up making the situation worse.
“About 30 to 40 percent of the people we work with have hard drive issues on older laptops,” Chris says. “For example, they reformatted it or gave it away.”
But the solution here is relatively simple. “Don't touch anything. Don't reformat or reinstall your wallet,” says Chris. Resist the urge to fix something. This is because it is likely to make things worse.
conclusion
It appears that a significant portion of Bitcoin has been lost to the sands of time, but your crypto stash may not be a victim. Therefore, it may be worth checking to see if you can recover your lost assets. And it's always worth understanding what you need to do to properly manage your account to avoid problems in the future.
