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How, practically does this work? Is it a password that you remember? What happens if you forget, or lose the piece of paper or hard drive it's written on? Do yo
by erehweb 4y ago
How, practically does this work? Is it a password that you remember? What happens if you forget, or lose the piece of paper or hard drive it's written on? Do you end up like the guy trying to dig through landfill? (https://www.thecitizen.co.tz/tanzania/news/business/the-search-for-over-160-million-in-bitcoin-buried-in-a-welsh-landfill-3957932 https://www.thecitizen.co.tz/tanzania/news/business/the-sear...) Or is the answer, "don't forget"? This doesn't work for most people.
- rahen 4y agoYou use a cold wallet, that is, a secure element storing your private key. Those chips are physically isolated from the computer and cannot be tempered with. If you lose your device (which should NEVER happen, it's a safe, not a purse), your keys are still encrypted with your PIN code and the device will self erase after 3 unsuccessful attempts. You can retrieve your private key from a 24 word sequence (seed key), which you will usually store on a fire proof and water proof medium like a like a billfodl or stamped washers. For added security, the private key will be derived from the seed plus an additional passphrase only known to you (kind of like a salt), so your key doesn't get compromised if someone gets his hands on your seed. Cold wallets didn't exist by the time of the incident you mention. https://steemit.com/cryptocurrency/@angelol/cryptocurrency-hardware-wallets-explained-ledger-nano-s https://steemit.com/cryptocurrency/@angelol/cryptocurrency-h...