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8 common ways to lose your Bitcoin and how to prevent it

Bitcoins can be lost under any circumstances, as in most cases users lose their coins due to human error and mistakes. Just as many mistakes have resulted in owners losing bitcoins in their wallets.

According to a 2019 study from the Wall Street Journal, approximately 20% of bitcoins were lost forever.


1. Loss of personal key

Bitcoin owners are advised to keep their personal key in the most secure place they can, such as keeping it in a safe deposit box or bank.

The reason for that is simple, when you lose your private key your bitcoin will be sealed forever with no way to get it back, it is almost impossible to recover bitcoin with a lost key

On January 13, San Francisco programmer Stefan Thomas forgot his password to a secure external drive that held the personal keys to an electronic wallet containing 7,000 bitcoins, which at current exchange rates would be worth about $240 million

Solution

If your private key is stored on physical media or the cloud, move it to a more secure location that you can only find. You can also create duplicates of your keys and give access to at least one trusted person


2. Cryptocurrencies

If you will do trades using crypto exchange you will not lose your bitcoins, but the exchange is more vulnerable to hacks. We count about 27% of all lost assets

Solution

If you do not want to trade your bitcoins, keep them in your private wallet where you control your private keys and do not keep a large amount of money in an exchanger


3. Social networking scams

Social media is one of the most effective ways of how scammers can gain access to bitcoins. In July 2020, we witnessed the biggest scam of all time, the accounts of Bill Gates, Elon Musk, Kanye West, and others were hacked.

The hackers used them to publish a charity event where they asked subscribers to send bitcoins to a specific account with the possibility of doubling them. After that, more than $100,000 in bitcoins was lost in a single day.

Solution

Individuals or crypto projects usually publish ads directly promotional to their giveaway or promotion

Validate with some verified sources before giving away your wallet or making transfers


4. Transferring to the wrong address

Many people do not realize that transferring to the wrong bitcoin wallet is the most common way to lose your bitcoins, just one letter is all it takes for your bitcoin to be sent to a stranger

Because Bitcoin transfers are irreversible by design, sending coins to the wrong wallet means losing them forever. Only if you send them to the person who will return them to you.

Solution

The smartest solution to avoid this is just to copy and paste the recipient's bitcoin wallet. After that, check the address several times to make sure you did not enter any extra characters.


5. Fake cryptocurrency wallets

Another way to scam is to create fake wallet apps and upload them to the Google play store. Sometimes they may pop up as new projects, and sometimes they mimic real cryptocurrency wallets. This is all to get users' credentials or their cryptocurrency.

When people download such fake apps, they ask for wallet details, password, and a personal key. On the other side, scammers start pulling crypto from real wallets. Sometimes scammers go so far as to allow users to make deposits, but with no way to withdraw until they steal all the bitcoins

Solution

Before downloading any of these applications, check if there is a verification symbol. If there is no verification symbol, then read user reviews, they should include a small number of complaints. Another way is to download the app directly from the crypto project.


6. Phishing

One of the most common ways to steal is "phishing" it is quite simple and very effective. They lure Bitcoin wallet owners to log into their account on sites that mimic the original

Coinbase, Binance and MyEtherWallet are sites commonly used for Phishing. In most cases these fake sites have different names than the original ones; .info, .co, or xyz instead of .com.

Solution

When you receive a link or email that redirects you to double your account or other similar promotions, check for availability and relevance simply by typing in a Google search and double-checking its name before going to any of the popular sites.


7. Catfishing

This is also one of the most common ways to lose your bitcoins. Catfishing involves creating an account or page in order to pass yourself off as a reputable person or page

Solution

Follow only verified accounts and sites of crypto projects and associated individuals. If something comes up, verify all information with other accounts.


8. Fake ICOs.

It's not uncommon for cybercriminals to create fake ICOs. People who are new in the field become victims of such ICOs that present themselves as a new cryptocurrency investment guaranteed to bring big profits.

Solution

Take the time to research each cryptocurrency project in particular the one that appealed to you the most before making any investments


Conclusion

Now that you are safe from the simplest and most common ways that people have lost their bitcoins and other cryptocurrencies, you will find it much easier to prevent such unpleasant events.

This website is operated by Eclipcoin Technology OÜ.

Please note: purchasing or selling Cryptocurrency carry significant risk. Prices can fluctuate at any time.
Because of such fluctuations, Cryptocurrency may gain or lose value. This is your responsibility on how to handle your own assets.