Since the invention of Bitcoin and blockchain technology, cryptocurrency has become a trending topic. Today, companies and young people are actively investing in this industry. However, there has been consistent news about how people have lost access to their Bitcoin and many are asking if it’s possible to find lost coins and how to find lost Bitcoins.
Meanwhile, a 2017 analysis by Chainalysis, projected that between 2.78 million and 3.79 million bitcoins were lost. This is frequently due to a lack of understanding of how a Bitcoin wallet works.
To that effect, we’ve carried out in-depth research and come up with this post to help understand how Bitcoin wallet works, and how to find lost Bitcoins. Thus, ensure you read this article till the end so you will not miss any of the steps you need to follow.
What are the Ways You Can Lose Access to Bitcoins?
Before we go into how to find lost Bitcoins, you should understand that you do not lose Bitcoins; you only lose access to them. Because Bitcoins are held on the blockchain network rather than in your wallet. Your wallet is simply a gateway to this blockchain, but your coins cannot be withdrawn from it.
In general, the most common way to lose Bitcoins is when you transfer them to an address you do not control. You lose access to the wallet in which they are stored. Or you may have forgotten your seed phrase.
Imagine your wallet as a door of a bedroom, the blockchain is a row of wardrobes in your bedroom. Your wallet is the key to the wardrobe containing your assets and your seed phrase is the password to using this key.
The only uncontrolled addresses you can access are custodial wallets, like in exchanges and trading accounts. With exchanges, you need both a key and password to move your coins from one Bitcoin address to another.
Meanwhile, if you lose the key but have the password, you can get a new key and access your coins because they are still in the wardrobe. If someone else gets your key but doesn’t have the password, they cannot access your wardrobe because the password is usually too difficult to hack.
You must understand this because scammers have recently been deceiving people into thinking that lost coins might be “recovered” through their “services.” Although this is impossible, as we progress, you will discover how to find lost Bitcoins.
READ ALSO: Why the Bitcoin Prices Are Different on Different Exchanges
How to Find Lost Bitcoins?
One of the reasons why you may not be seeing your bitcoin in your wallet is, your copy of the Bitcoin blockchain may be out of sync. In that case, you need to wait for your Bitcoin nodes to sync with the rest of the network and download the latest block.
Another reason is accidentally deleting data. If you deleted your wallet.dat file, first look for it in the recycle bin or trash folder. In Linux, you can usually find that file under the ‘.bitcoin/wallets’ directory.
Install Bitcoin Core on the new computer, and copy the ‘wallet.dat’ file back into the ‘.bitcoin’ directory under your home directory, if you use Linux. If it is Windows, it may be in the hidden ‘AppData’ directory.
Meanwhile, the file browser must show hidden files since the .bitcoin directory is hidden. If you aren’t sure where that is, go to ‘/home/username/.bitcoin/wallets.’
You can also use a recovery tool like Recuva, which searches your hard disk for lost items and lets you look through them safely. This program is useful for formatted hard drives. You can back up your deleted wallet to an external USB drive or a personal cloud if you find it.
Additionally, the ‘dumpwallet’ command in the bitcoin-cli can also be used to retrieve your private key, in which case you can write it down and keep it securely.
Moreover, if your computer won’t boot, you can search for the wallet.dat file on the hard drive using a Linux Live DVD or Live USB to access the Windows “AppData” or Linux “.bitcoin” directories, respectively.
How to Find Lost Bitcoins in a Hardware Wallet?
The majority of individuals store their bitcoins in hardware or cold wallets instead of creating their nodes. Consequently, your private keys must be recovered if your Ledger Nano hardware wallet is lost using the seed phrase you were given on the recovery page that came with your wallet. Keep in mind that if you do not have the seed phrase in your wallet, your assets are lost.
When it asks if you want to configure your new Nano S as a new device, you can hit the button that corresponds to the ‘X’ by using the seed phrase on the two buttons at the top of the device. When prompted to ‘Restore Configuration,’ press the button corresponding to the tick. You can regain access by entering a new pin and your seed phrase.
FAQs About How to Find Lost Bitcoins
Is it possible to recover lost Bitcoin?
Yes, but there are exceptions, it may be possible to retrieve lost Bitcoin if you lose a hardware wallet, but still, have your private keys and passwords. However, if you lose your seed phrase or accidentally send your Bitcoin to an unknown address, your asset will be lost forever.
Can Bitcoin be permanently lost?
Yes! Over the years many users have lost access to their assets by forgetting passwords or misplacing hardware wallets. According to Chainalysis, about 25% of bitcoins are believed to be lost forever in this manner.
Conclusion
Just as we mentioned before, there are many different ways for cryptocurrency owners to lose access to their assets, like not understanding how crypto custody works, sending your Bitcoin to the incorrect agreement, or forgetting your seed phrase.
Also, keep in mind that cryptocurrencies can be held by owners using a cryptocurrency wallet or they could be held on your behalf by an exchange. You can use the company’s system to regain access to your digital assets if it has custody of them on your behalf. However, you won’t have that option if you take custody of your digital assets.
Hence, we strongly advise anyone new to cryptocurrencies to sign up with a custodial wallet because there could be risks involved in holding assets personally. With a custodial wallet, you could easily get in touch with your trading company and access your coins.
Custodial exchanges, on the other hand, are generally secure but are nonetheless vulnerable to hacking. Hence, decide if you want to rely on the exchange or yourself for security. We hope this article has helped you in understanding how to find lost Bitcoins.
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