Lost your crypto wallet? Here's what to do

First, it’s crucial to understand some basic crypto terminology, such as public key, private key, and seed phrases.

A public key is similar to a bank account number. It can be shared with people so they can transfer cryptocurrency to your wallet. A private key, meanwhile, is more like a password: It’s used to access funds or sign a cryptocurrency transaction. It is crucial to keep the private key secure.

If you lose or forget your private key, a seed phrase or recovery phrase can serve as a lifeline to recover your crypto wallet. Think of it as a backup password—it’s a sequence of random words, usually 12 or 24, that stores the data necessary to access or restore your cryptocurrency. These seed phrases are generated by crypto wallets and are vital for safeguarding your digital assets.

Here is an example of a seed phrase: mango, slipper, cow, river, lentil, father, mobile, bulb, chicago, towel, nail, mars.

Since the seed phrase is the key to regaining access to your wallet, it’s critical to keep it safe and private. If it falls into the wrong hands, someone else could potentially access your funds.

If you’ve lost access to your wallet but still have your seed phrase, regaining control is fairly straightforward.

Open the wallet app or browser extension, find the “Recover Wallet” option, and enter your seed phrase. Double-check that the phrase is entered correctly. Then, create a new password to secure your wallet on the device. The wallet will link to the blockchain, which could take a few seconds.

If you’ve lost your seed phrase, regaining access to your wallet becomes much more difficult. Unfortunately, the chances of success in this situation are slim. However, there are a few steps you can take to explore possible recovery options.

Start by contacting the wallet provider, i.e. the company whose wallet you are using. The company may help if you can provide sufficient details, such as the email address or phone number associated with your account. While this isn’t a guaranteed solution, it’s worth reaching out to them for help.

Next, if you remember your wallet password, your chances of recovery increase. Some wallets may allow access with just the password, particularly if the wallet was used on a device that retains some data.

As a last resort, you can consider hiring a data recovery specialist. These professionals may be able to retrieve deleted files containing your recovery phrase if it was stored electronically. However, this approach is not foolproof and does not guarantee success.

Earlier this year, a man in Europe recovered nearly $3 million in Bitcoin after thinking his password was lost forever. The anonymous man, dubbed “Michael,” hired a team of security researchers who were able to unlock his Bitcoin wallet and retrieve 43.6 bitcoin, as reported by Wired

In 2013, Michael created a password using a generator called RoboForm that consisted of 20 upper- and lower-case letters and numbers. Due to security concerns, Michael kept the password in an encrypted file instead of storing it with RoboForm.

When the encrypted file got corrupted, however, Michael lost access to the 20-character password required to access the 43.6 bitcoin in the wallet.

Michael lost hope of recovering the password and his bitcoin, but in 2022, he convinced electrical engineer Joe Grand to try to help. Grand, who goes by the hacker handle ‘Kingpin,’ explained in a video that he and his colleague exploited a long-fixed vulnerability in the RoboForm password generator. Read the full story here.

It’s crucial to recognize that cryptocurrency is still a relatively new form of investment. Therefore, it’s essential to thoroughly understand it before diving in and to avoid getting caught up in common crypto myths and misconceptions. 

Having a solid grasp of basic crypto principles can help you avoid costly mistakes. For example, understanding the importance of security will prevent you from sharing your private keys or seed phrases with anyone. These are the most sensitive pieces of information in your crypto wallet, and keeping them secure is crucial to safeguarding your assets. Being informed can also help you steer clear of common pitfalls and scams that target less-knowledgeable investors.

Moreover, before investing in cryptocurrency, it’s crucial to decide where you’ll store your assets. Selecting the right crypto wallet is a key step that should be taken before making any investments.

Last but not least, it’s crucial to store your seed phrase on a durable material and, even more importantly, keep it in a secure, hard-to-access location. Place it in a locked container, such as a safe or lockbox, to protect it from physical theft or damage.