According to a BlockChain Data Platform, Chainanalysis, there are more than 20% of the existing 18,000,000 BTC which is roughly 177 Billion US dollars worth of BTC are known to be stranded or lost. Most people that had lost their BTC simply just because of losing or forgetting their passphrase, which is more valuable than what you store in that digital wallet acording to BTC Holders which is logically true.
One case that is recently featured in Cryptopotato, “The Man who lost his Access to 7002 BTC”, has been a very heart breaking story I ever read. Whereas, Mark Michaels, a software engineer in San Francisco lost around 328,000,000$ (USD) worth of BTC as of today’s current BTC/USD market price. He stored his passphrase and accidentally deleted his the file that contain the passphrase. He never cared that time at all, as it happened long before on 2011, where as the BTC price has almost no value at 0.0008 per BTC.
How he get 7002 BTC?
According to his statement, he got the 7002 BTC when a cryptofan sent him 7002 when a crypto fan liked his educational video about Bitcoin. He did not care about it that time, (most of us does probably), since Bitcoin price is almost worthless at that time, with the assumption too that BTC will not appreciate its value a thousand times today.
Year after year as Bitcoin unexpectedly shows good value to people and price have arose, he began to get interested back bitcoin, knowing that he already losts his passphrase and forgotten his password. He tried again and again to recover his account by trying to remember his password. he stated that.
“I would just lay in bed and think about it. Then, I would go to the computer with some new strategy, and it wouldn’t work, and I would be desperate again.”Mark’s stated
The Important of Passphrase
The passphrase is a randomized string of words that will get you access to your digital wallet. This is important when you lost your account and the login credentials of your digital wallet.
One thing to consider is writing it on a piece of paper, keeping multiple copies. It is widely recommended now, your you have a small value of cryptocurrency or big.
As with Mark’s experience losing access to his Bitcoin which is not a common case, we can try to reflect and learn from it and will do take care of our passphrase even if the value is just small, we never know how much would it be in next year.
Cold Wallet Vs Hot Wallet
A Cold wallet is a type of wallet that is not connected to the internet to avoid any access. A cold wallet can be Hardware Wallet or a Paper wallet which are both called Offline Wallets.
Cold wallet is the most secure wallet so far, as it is stored locally without access to the internet. But of course, the ability of performing a transaction and having a multiple Crypto Assets in not available.
A Hot wallet on the other hand is the oppostte of Cold Wallet. Your Key phrase are stored in your Digital wallet provider. These kind of wallet are more vulnerable of getting hack. The Digital Wallet provider and you have access to your fund.
But as Cryptocurrencies are widely used, hot wallet provider such as Coinbase, Bitcoin.com, Trust Wallet and other wallets are strengthening their security from web hacking. These company assures the safety of your Crypto. Other security awareness rely on invidual account holder.
Digital wallets or Cryptocurrency wallets is comparably similar by keeping your money at home in a vault(you can only access), and Hot Wallet is like keeping your money in the bank, where bank has access to it.