Bitcoin can make you go from coinless to flamboyant in a blink of an eye. But similarly, the other way round holds true. Since the entire system is digital, special care must be taken to preserve coins. Studies suggest that cases of Bitcoin and other cryptographic assets getting ‘lost’ in a year have exceeded the mark of coins worth millions of dollars. Of all these cases, leaving rare exceptions of recovery here and there, most of them cannot ever be recovered. These coins have taken their exit for good, leaving behind their circulation network permanently.
But where do they go?
If your online wallet has no added feature of recovering crashed data, then all your coins along with your wallet are said to be lost. In layman’s language, such a scenario can be compared to a case where a bank containing numerous fiat currencies is put on fire. You have no means of recovering the lost money and bringing it back into the financial market.
What are the causes of lost coins?
The reasons for coins being lost in the void are varied in nature. Let us look into some of the most common causes:
● Cases of fraud
It is always advised that you should only participate in transactions if you trust the other party. Due to the perks of Blockchain technology, one cannot alter information once it is sent for processing. While it may be seen as a strong security measure, users have to be extremely cautious before initiating a transaction. If you by mistake send coins to a fraudulent or wrong address, you could lose your money and there’s hardly any chance you will get it back. However, in this case, the coins will be in circulation as long as the recipient key is accessible.
● Coins landing in burn addresses
In many situations, two addresses can get mixed up. In such cases, as we have just discussed, it is very difficult to revive the lost coins, but they remain in circulation. But at times, your coins can land in burn addresses. These addresses are of wallets that no longer have any access. Hence, it is practically impossible to spend coins again, from that wallet. Surveys report that more than 4% of the available number of Bitcoins are lost every year. Your coins will keep existing in pen and paper and still be valid but you won’t be able to use them until you can recover them from the void.
● Storage issues
Issues regarding suitable storage are a rampant cause of losing coins. It is important to remember where you stock your cryptocurrencies. Hundreds of online wallets have sprouted in recent times but all of them are not reliable. There are also scopes of maintaining a wallet and trading cryptocurrencies through the same wallet, but a thorough inspection of such a website is deemed fit. If your coins aren’t stored properly, you might get cheated by fraudulent organizations who push you into the pit of dummy wallets and later steal all your savings. Hence, choosing the right software like wealth matrix is a necessity to prevent the loss of coins.
Can coins be revived?
Through time, the valuation of cryptocurrencies is rising by stark figures and people are increasingly becoming aware of how precious these coins can get shortly. While it is next to impossible to vouch for the fact that one can revive their lost coins, precautionary measures such as these can be undertaken to prevent loss of coins:
- Wallets must always be backed up and securely encrypted.
- Bitcoin credentials should be stored in safer devices like hard disk drives rather than in cell phones.
- Plan authorized accesses accordingly so that your next generation can participate in crypto.
- Two-factor authentication must be taken up to ensure the better safety of wallet details.
Hence, a wiser plan is to already keep your wallet properly secured than later fretting about lost coins. Understanding why coins are lost and then acting suitably will ensure a lesser number of coins slipping into the void.