What to Do In Case Of Bitcoin Loss Caused by Hardware Failure

What to Do In Case Of Bitcoin Loss Caused by Hardware Failure

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According to Yahoo Finance, the growth of digital currencies is 160% in 2020. It is a clear sign that cryptocurrency is gradually dominating online transactions. At the beginning of bitcoin, the concept was highly criticized for the possible hacking risks. At present, hardware wallets have removed the hazard. But, what if you are about to lose bitcoin due to a hardware wallet failure? There are solutions as well, but you should not try them out. In such a critical situation, you need professional help rather than searching how to fix windows detected hard disk problem on the internet. The case is unique and needs to be treated differently. Let’s check out.

What is a bitcoin hardware wallet?

People who own crypto resources often require a device called a bitcoin hardware wallet. It is a tiny portable key that you need to access crypto assets from any place worldwide. The tool quests no log-in and new account creation. 

The device is designed to preserve a user’s secret keys and cryptocurrencies in a protected mode. A user can both send and receive cryptocurrencies using this wallet. 

Aside from a hardware wallet, a crypto wallet can be an app and a website to handle your secured information and private keys. Usually, bitcoin wallets are classified as hardware, desktop, mobile, and web wallets.

How does a bitcoin hardware wallet work?

Hardware wallets are very portable and feel cool. You just need to plug-in the gadget with an internet-enabled device, and it starts working pretty quickly. But how does it work in reality?

A user can carry the portable tool and store money offline as well. When he requires buying or selling anything, he can simply use the device for a secured transaction. 

The first thing to understand is that the hardware wallet never stores the cryptocurrencies. They are kept on the blockchain, where we get entrance using a hardware wallet. Before you adjoin any transaction, the private key verifies your authenticity on the blockchain and lets you get into the coins. 

A hardware wallet plays the role of keeping the private keys safe and disconnected from the internet. Due to no constant internet connectivity, the wallet and cryptocurrencies remain secure from hacking attempts. Hardware wallet also assists to sign and confirm dealing on the blockchain. 

If you lose the device somehow, the private key can be freshly re-generated by applying the seed phrase. In that case, your private key can be used with a new hardware wallet. 

Benefits of Cryptocurrency Hardware Wallets

Hardware wallets offer a highly secured transaction than ordinary wallets. We point out some advantages of a hardware wallet as follows.

  • Your private key is the only way for entry into the blockchain. The access is too secured from hackers since it is kept in the wallet, is disconnected from the internet.
  • The private key is protected by encryption. It can defend against the attempts of forceful or unauthorized entry.
  • Cryptocurrencies are virtual, which means they need no physical space to store. That’s why you are allowed to save unlimited bitcoins in your account. The only thing you need to operate transactions is the hardware wallet.
  • Most internet-enabled devices are prone to be affected by viruses. However, hardware wallets are entirely protected from such issues.
  • Hardware wallet verification is an unavoidable thing during any transaction. No one can falsely verify it online without the device. 

How safe are hardware wallets?

A hardware wallet is one of the protected devices on the planet that cannot be hacked. Behind such strong security, the manufacturers apply the principle of isolation, which is called cold storage. 

The mechanism is quite simple to understand. The security system of a device has to be unpicked if it needs to be hacked. In most cases, such devices’ safety is put off while it gets connected to the internet. A hardware wallet is unique because the private key never gets “hot,” which means it does not get exposed online; even the device is connected to the internet. 

Due to these reasons, a crypto wallet user needs not to worry about safety, even if the device is lost or stolen. 

What to do in case of hardware wallet failure?

The only downside of a hardware wallet is, it can be destroyed accidentally. The device can malfunction in some cases as well due to hardware relevant issues. Keep in mind that restoring a bitcoin wallet is a tough job. You never should try to fix them by yourself. We highly recommend contacting a data salvaging service provider immediately. Most of them will professionally handle the issues and fix them safely. The percentage of salvaging data from a damaged hardware wallet is satisfactory in maximum cases. 

Bitcoin hardware wallet safety tips

Bitcoin hardware wallet is secured. However, some mistakes, as well as unethical practices, can ruin the security in no time. We would like to share some safety tips if you are a new bitcoin wallet user. 

  • Never buy a used wallet even if the offer is mouthwatering since the private key is known by other users already. 
  • Like a used wallet, avoid a pre-seeded wallet at any cost. You will be hacked after a few whiles. Remember that a new wallet never comes with a pre-printed seed.
  • It is impossible to get your private key exposed online. But, a simple mistake can make it happen. Never write down your private access or recovery phrase on other devices like a computer or a smartphone.
  • Do not share the recovery phrase with anyone, even not with your spouse.

Bitcoin loss due to a hardware failure seems like an odd situation. However, they are still retrievable if mended by a professional. Besides, the process does not risk your account's safety because no one can access the blockchain without a password.

© 2020 CryptoDaily All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

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