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Losing Your Bitcoins

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Estimated reading time: 2 min

Are Your Bitcoins Safe?

One of the main issues that Satoshi faced when inventing the Bitcoin blockchain was security. Even though the Bitcoin network is highly secure, things like malware, poor safekeeping methods, and user error can cause people to lose their coins. Since the person holding the coins has sole responsibility for its security, it leaves the door open for mistakes that could result in these losses of coins that may never be recovere.

Storing Bitcoins On Exchanges

‚ÄčLack of knowledge of private wallets or the convenience of having your bitcoins in one place could result in the loss of your funds if left on exchanges which are honeypots for hackers out to make a quick buck. Using a lesser-known exchange or one that may not have high security can leave your bitcoins at risk. If you decide to store your funds on an exchange, make sure it is a reputable one like Coinbase, Binance, or Gemini. Also, make sure you are visiting the correct exchange site as phishing is popular among scammers. Be sure to always double-check the domain of the exchange and the use of bookmarks is wise. And never visit your exchange by clicking random links to them from other websites. Using hardware wallets like Ledger and Tresor adds an extra layer of security because they can be disconnected from the internet and stored in safe places.

Free Givaways

Free giveaways from famous or popular online figures have become a popular way to scam you by asking you to send them a small amount of crypto with the promise that they will return it with an added bonus. If it sounds too good to be true, it most likely is. So please, don’t ever send money to strangers on the internet.

The Loss Of Your Private Keys

Losing your private keys will be devastating as they are what gives you the ownership of your coins. Numerous stories online can be found about people accidentally throwing away old hard drives with hundreds of bitcoins stored on them that were bought when Bitcoin was really cheap and are now worth a fortune. To help prevent this loss, always create a working backup of all your wallets and test the recovery phrases. It is also a good idea to write down the recovery seed on a piece of paper and store it in a secure place.

ICOs

Thousands of companies launched ICOs (Initial Coin Offerings) to raise funds for their projects during the Bitcoin boom in 2017 that turned out to be scams. It is reported that about 80% of these tokens are still trading below their initial price leaving investors holding nearly worthless coins or they just have disappeared altogether. Always research the project and past projects along with the team leading it before investing in any project.

Sending Your Coins To The Wrong Address

Unlike the traditional financial system we have that can reverse or refund your money if a mistake is made, Bitcoin transactions are completely irreversible. Transactions sent to the wrong address might mean they are gone forever unless the owner of the address is nice enough to send them back. Malware can paste a hacker’s address even when you have copied and pasted a legitimate one so always re-check the wallet address before sending any funds or they could get lost in the void and never spent again.

Verify Everything

Always read reviews and follow instructions closely before investing in a project or using an exchange. Use businesses that have good reputations and have a long-standing presence in the cryptocurrency community.

 

 

 

 

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