In the past, losing money was a very common thing. Of course, in many instances, all lost funds are often irrecoverable as they would have been picked up by someone else or something. These days, it’s harder, thanks to the ubiquitous use of cards to pay for everything from your gas to your cable TV to car payments.
While it’s possible to lose your physical wallets, you can take swift action in blocking those cards, thanks to an abundance of centralized financial institutions. Passwords can be changed, debit cards rendered invalid and so much more, just with a phone call.
Do you know what you can’t fix in a similar approach with a phone call? It’s your cryptoasset’s wallet’s private keys. If they are lost, or stolen, chances are you may never be able to recover them, no thanks to the decentralized nature of cryptocurrencies.
There’s no central agency to contact, no one to ask to help deactivate your account or retrieve your wallets. Once those are gone, they’re gone. It’s that simple. This is one of the bigger challenges that cryptocurrencies have been unable to fix; and the costs have been astronomical in some cases.
When bitcoin hit the $20k mark, there were stories of individuals who had bought hundreds of bitcoins in the past and were looking for ways to access their wallets. Unfortunately, most weren’t recovered, which means all that crypto asset is gone… forever. Little wonder experts estimate that over 4 million bitcoins have been lost because their owners can’t access their wallets anymore.
Your private keys are essential for your access to your cryptoassets. Without them, you’re literally locked out and unable to access them. This is why the saying “protect your private keys as though your life depends on it” runs rampant in the cryptocurrency world.
While many store them in the cloud or computing equipment –dangerous because those can be hacked by determined hackers, or on their phones –which could get lost or stolen, the truth is none of these options are actually viable and reliable.
With those, you have to hope that they are safe. And when it comes to keeping your cryptocurrencies safe, hope is not enough. You must be 110 percent certain that it works and is incredibly safe.
Therefore, smart crypto owners have elected to either store their private keys on select USB sticks or gone the old fashioned way of simply writing them down in several pieces of paper and hiding them in several key locations.
Of course, these aren’t foolproof either as we’ve seen individuals who mistakenly threw away thumb drives with their wallets and private keys –the most popular being Welshman who threw away a drive containing 7,500 BTC –currently valued at over $40 million USD.
So, while many have lost their private keys, it doesn’t mean that you should go through the same. Thankfully, some companies are now coming up with technology that can help you recover your private keys in the off chance that they are misplaced or lost.
Possible Viable Option For Private Keys Recovery
Some blockchain experts are beginning to explore the possibility of utilizing “zero-knowledge proofs” to recover private keys without necessarily affecting the wallet’s security. This is based on the idea of being able to prove that you know something without actually revealing intricate details.
To that effect, a product called the SovereignWallet has been created. This utilizes zero-knowledge encryption that will help users get their private keys back.
All it requires is downloading the app to another device if their phone with their old wallet, becomes damaged or lost. It’s able to do this, thanks to the private key being encrypted with a password and PIN. These two are then stored on the company’s highly secure server with military grade encryption.
The app also provides an alternative unlocking option that requires the use of your mnemonic words that are attached to the private keys –these are usually created at the same time as your private keys and associated with them.
Is SovereignWallet Safe?
While there’s a valid concern about individuals with malicious intent being able to access the wallet by using the app, the reality is that this will be hard to do, thanks to the zero-knowledge proof needed.
If they don’t know the necessary password, PIN and/or mnemonic words, they’ll just be wasting their time, as it’ll be an exercise in futility. The app is also designed to monitor and keep track of the user’s usage patterns.
Anything out of the ordinary and its safety measures will kick in, further locking any snooper or hacker out of the system. And when you log into a new device, you will be required to go through additional authentication to prove that you’re the legitimate owner of the wallet.