What Happens if You Lose Cryptocurrency Hardware Wallet?
While blockchain is known for being very secure, currency exchanges are often vulnerable to outside attacks. Your Cryptocurrency Hardware Wallet can also be lost, and you might lose all of your assets if you're not careful. That's why you shouldn't rely on software protection alone. Almost any software platform can be hacked and it's up to you to protect your assets from this drastic situation.
For instance, the infamous MT Gox exchange hack had resulted in millions of dollars lost. Also, Poloniex has lost about 12.3% of their customer’s Bitcoin. And Jaxx, which was known to be a powerful software wallet, has also been exploited via a software hack.
Since cryptocurrency is so decentralized, there’s almost nothing you can do when you lose your cryptocurrency wallet. However, we have a few tips in this guide that can help you retrieve it in the event that you do lose it.
Do You Remember Your Recovery Seed?
Your recovery seed is a 12 or 24-word passcode that's used to help retrieve your wallet. This is given to you once you install your hardware wallet. In the event that you lose your crypto wallet, you will be prompted to write down this recovery seed. This will help you obtain your wallet information if you lose your hardware wallet.
To ensure that you protect your cryptocurrency hardware wallet, make sure that you keep your recovery seed written down in multiple locations. Don't just store it in a private software location (i.e., Google Docs, Dropbox, etc.).
You should write down the recovery seed on a piece of paper. But don't just stop there. You should laminate the paper to protect it from scratches, water damage, or other things that can harm your data.
Tell a Family Member
Don't just keep your crypto assets to yourself. When you die, chances are your family will be unable to obtain your assets if you don't inform them. That's why you need to give a trusted family member or friend your information in the event that you lose your hardware wallet.
To be safe, you should also give them your private keys and your recovery seed. By doing this, you save yourself a lot of trouble and keep your assets contained in one safe spot.
And make sure that you are giving this information to someone that you can trust. For instance, give your information to your brother, mother, or someone within your immediate family. This helps prevents the chance of insider issues.
Consider Getting a Cryptosteel Device
Cryptosteel devices are all the rage within the cryptocommunity. They are durable steel devices that help the user retain their 12 words or 24 seed. Getting one gives you a physical piece of storage for your assets.
Remember Your Private Keys
You should also have your private keys stored somewhere. Just like your recovery seed, you must have your private keys written on paper or in another safe location. If you are unable to obtain your hardware wallet, having your private keys will help you obtain all of your information and cryptocurrency stored on it.
Overall, it's up to you whether you want your crypto assets stored or gone forever. If you do lose your hardware crypto wallet, make sure that you have all of your information stored before this happens. By doing so, you’ll increase the chances of retaining your crypto data and keeping your assets.
Do you have any extra questions about protecting your cryptocurrency hardware wallet?
Please share them in the comments below.