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In this post, I would reflect and discuss on the questions, Why there are losses of crypto wallets that contain huge amount of crypto assets, in past 10 years ?Which are the Biggest Losses of crypto wallets ?What should be the protection techniques and measures you should have to save your wallet ?What will be its effect on the cryptocurrencies like BTC and ETH in Blockchain ?Is it possible to recover dead crypto wallets and cryptocurrency which is stored inside it ?
So, let's start this topic by first question
Why the loss happening of crypto wallets?
We all had a tendency to forget something, if we keep something precious of ourselves at that only some place, which we thought that it will be secure and we will usually get back onto it when we need that thing back and for a while if we shift our attention away from that thing and got ourselves busy in another useful work of our daily lives, we will slowly drain our memory of that precious thing out from our mind.
Now, in crypto world, all the cryptocurrencies in a user crypto wallet are not governed and protected by government banks and third party hands, it is governed by the user itself, who had stored their cryptocurrencies and other crypto assets to his or her wallet. A wallet in Web 3 internet can be assessed and locked in 2 ways, that are either the user uses its password to access its wallet or a seed phrase, in case the user wants to recover his or her wallet assets. This is the most important and precious things other than the crypto which is stored inside any Web 3 wallet. Due to human laziness to write down or backup the password or seed phrase which is required to access or recover his or her wallet, most of users lost their billions of worthy of cryptocurrencies which that wallet holds. Only that particular user can again gain access if he or she finds or recover the wallet password or seed phrase by some manner, otherwise that wallet becomes dead and is of no use.
No one in the world can access that dead wallet crypto without its either of these 3 things : -
1- Seed Phrase.
2- Private Key.
3- Password.
Now, let's move to second question
Biggest Losers of their Crypto Wallets ?
There is a list of many great losers who had made their crypto wallets, which contains billions and millions of Bitcoins, , because of not backing up their seed phrases or passwords.
Here the list goes,
Satoshi Nakamoto
He is the creator of the world's most valuable, first and biggest cryptocurrency . His wallet contains approx. 1.1 million worth of Bitcoins as of current market price reported in 2020. Now, in 2022, it's price is much higher. It is known that Satoshi had not touched his wallet in 7 years or later, or he might had lost his wallet wallet private keys and seed phrase to access his wallet. If Satoshi could ever again recover or find his keys to wallet, he will instantly become one of the richest person on the earth. This news is just a baby step, I will tell you more about this in my next post.
Stefan Thomas
The software development is high in the world and this might is little easy in the present world, but not 10 years before, and can easily cause loss of memory due to tension and no freedom in work, if a person doing software development does not takes his or her time to release tension and give himself or herself some freedom to enjoy. Stefan Thomas, a software developer who had also taken his hands on Bitcoin, had collected nearly an estimate of $220 million in his Bitcoin Wallet. After that, he had simply forget his password, possibly he had backed up or written it down somewhere, and due to this his wallet gets locked. He had tried several attempts to break into his own wallet, but he couldn't make it up, and thus his wallet had been dead since 2011.
James Howells
Alert to everyone, who throws or sell their old laptops : - 'Remember to take out your old hard disk or ssd'. This man named James Howells lost his richness valued more than 7500 BTC in year 2013, by throwing the laptop which he considered obsolete, meaning will no longer work or with lack of interest in old laptop. This is the common case in early 2011's, where many unknown persons had lost their crypto due to anger or making that thing obsolete. He had tried to search for his laptop in landfills and even asked for the permission, but he got with no luck.
Gerald Cotten
He was an Canadian Investor, who was best known for QuadrigaCX. He founded this company back in 2013, after graduating from a business school. Back then in 2013, since no banks accepts crypto payments in his company QuadrigaCX, he had used some shady techniques to transfer his funds and his company all funds and revenues which were generated in his company to cryptocurrency, to hold onto all the company funds. He did this technique of collecting all the company funds to cryptocurrency in his crypto wallet till 2016, when he had most of the cryptocurrency and then in 2016, he turned his company to one-man operation and he removed all his employers and workers. He also then created and printed his own crypto tokens at his own choice and will. He had faked his own identity in the company where he works by 2016. He did generated by following a crypto scam, that is named as 'Ponzi Scheme'. In 2018, he died in India, and before he died, he give all his revenue generated by Ponzi Scheme to his Wife. Also his death is to be believed faked, by some officials.
I had previously written down my post on Ponzi and Pyramid Schemes, you can check it out here by clicking below link,
What are Ponzi and Pyramid Schemes and how to keep safe from these scams ?
If you want whole knowledge of crypto scams, I had included all links, including this one below, in parts, you can read it out there, after complete reading out this post.
Individual X
Individual X is an group of unknown hackers who are very creative and were in dark web. In 2018, this group by their some unknown skills had taken control full of 69,000 Bitcoins. After the report which is generated from this case by the officials who had looked into this, they had found that owner of that Bitcoin Wallet is 'Individual X' and this person is not from general public, this person belongs to US Government. Individual X had also stolen huge money from many famous websites, website owners had claimed it.
Now, the third question
What are the protection measures should be taken to save from these types of traps ?
One should have enough knowledge before falling into these types of traps. Some of the hacks to save it from are : -
a) One must never share his or her password, private keys and recovery keys to anyone, before knowing their objective in long run, because if did, this will lead to a 'Ponzi Scam' as done by Gerald Cotten.
b) Do not throw your old pc or computer, always take out hard disk from it if you are dumping it or selling it, especially if your pc or computer is too old, like 15-20 years old, now a days rarely found, because many are moving them to new ones according to technologies, but still if your pc is too old, you should better take it out and keep with yourself safe. If you don't, you will end like James Howells.
c) Always use trusted platforms for cryptocurrency exchanges. Don't use third parties for exchanges. An example of popular crypto exchange now a days is Binance. Use only trusted platforms, don't get into evil hands like 'Immutable X'.
d)Always remember to store your password, private keys and recovery phrase in multiple places from where you can easily take out and remember that places. Don't end losing like Stefan Thomas.
Now, the fourth question
What will be the effect of loss of cryptocurrencies in Blockchain ?
Blockchain will never get affected by the loss of crypto assets and cryptocurrency. One advantage of Blockchain is that, if you had done the transactions in cryptocurrency or receive funds in it, and you didn't withdrawal over the years, let's say 5 years, then after 5 years, you will see that your cryptocurrency and other crypto assets which are stored in it, will get increase in price due to inflation and growth and value of cryptocurrencies over the past 5 years. Example you will have $100 of ETH or BTC stored in it, these will be likely to be somewhere between $900 or more with respect to market signal rate. You will make profit.
Now, the fifth question
Is it possible to recover dead crypto wallets and cryptocurrency stored in it ?
This is not really possible in any case. This is only possible when you have its recovery phrase, password and private keys to fully restore the crypto wallets. Some big companies claims that they can recover your dead crypto wallets if you remember any some values of that wallet private keys or some words or a single word of that crypto wallet. These companies usually charge huge amount of money from you to do this task because it is a head and tails game, with no possibility of luck. But this is pure waste of time and money, so keep your recovery phrase, private keys and password safely written to somewhere where you remember and don't share those details with anyone.
This is for this post.
Thank you for reading.
Look at this my post, on How to setup Meta Mask Web 3 Wallet, if you haven't created till now, I have explained here in detail :-
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