Seriously, backup your crypto wallets guys!
I am guilty of being one of those people who take the task of backing up their crypto wallets not very seriously. This would have cost me a loss of Bitcoin worth $367.56 today.
I keep my BTC on an android wallet called Bitcoin Wallet. Its a really good wallet, one of the safest, because your private keys are stored locally on your device. If you use an exchange wallet like, Zebpay or Unocoin, your private keys are with the company. They can run away with your crypto and you can’t do anything about it. This functionality of storing your private keys locally could be a double edge sword though ..
On February 28 2018 I came across a few articles online that rumoured Telegram, the chat application, was going for a second round for its ICO. Even The Verge wrote an article about the same. I registered on the ICO website and sent some BTC to the address which was given to me. But soon I realised that it was a scam ICO. Telegram’s second round of ICO was being done privately, not publicly. There were a lot of fake websites which had sprung up scamming people.
I swallowed the fact that my BTC were in some scammer’s wallet and moved on. Today afternoon I had to hard reset my phone as it was giving problems with data storage. BUT I FORGOT TO BACKUP MY BITCOIN WALLET >?%! When searching for my previous backup I saw the last backup was on 1 January 2018, almost 2 months before this transaction. I restored the backup and had to wait for an hour for it to sync. I was facing a loss of all the BTC which came as change in the transaction mentioned before.
Luckily I didn’t loose them. I think what happened was the change came back to a new address, but the one which the wallet already owned. When a wallet generates addresses, it does in a batch. Like it would create 80 new addresses in one round and keep using them as required(PS- I’m not sure of the exact number). So the address to which the change came back, that address’s private key was already there in my 1 January backup. *phew*
This experience has got me thinking about how to store crytpo efficiently. On one side you have HD wallets, which generate addresses based on a seed phrase. You only need to keep your seed phrase safe and you can be sure that you can recover all your coins. But if the seed is compromised, all the coins are gone. And on the other side you have wallets like Bitcoin Core where you need to store private keys of all the addresses on which you have crypto. You are in total control of your coins in this case, but you need to backup regularly. Then there are wallets like Blockchain.info, which are a hybrid. Maybe in future people would come up with better wallets which socially advanced monkeys will find easier to use.
Anyway, I’m a happy man now that I haven’t lost my BTC.