Losing a phone, hardware wallet, or computer with a software bitcoin wallet on it, especially when they contained a substantial amount, can be devasting and anxiety-provoking. Bitcoin recovery can be time-consuming, complex, computing-intensive, and sometimes even impossible. We know, and we’ve helped people recover their funds.
Not all situations are recoverable, unfortunately. Generally speaking, the more information you have, the better. Let’s go over the cases where we can help. The recovery effort, time, and costs are directly associated with how much information is missing. Please know that there is an amount of missing data where ceases to be economically feasible or impossible to recover the funds. We will get in the weeds a little bit here, so if you are confused, feel free to reach out to us for a free consultation!
Lost, Locked Out, or Destroyed Hardware Wallet
Generally speaking, hardware wallets such as Ledger, Trezor, KeepKey, and Coldcard are relatively easy to recover. However, you must have at least most of your seed words in the correct order or all the seed words in the incorrect order. Alternatively, you could have the private key, but we will assume you have the seed words for this web page. If you also used a “hidden wallet,” also called a BIP32 passphrase, this can also be recoverable; however, we will probably need all the seed words in the correct order. If you have a known bitcoin address where funds are stored, this is also very helpful. Additionally, it is useful to have a list of known passphrases; you were amongst the passphrase possibilities. Again, the more information you have, the more likely we will recover your funds.
Phone Software Wallet
This situation is similar in many ways to a lost PC. Once again, you will need most or all of the seed words, and order matters. Hopefully, you wrote down your backup seed when you created the wallet. We generally know the derivation path based on the hardware wallets (especially if you have a known address). With software wallets, it becomes more important that you recall the software you were running so we aren’t running multiple passes on different paths. Assuming you have most of your seed words and know the software type, we should be able to assist with recovery here, similar to that with a hardware wallet.
Software Wallets on PC’s and Mac’s
There are potentially more options with a software wallet on a PC than with hardware and phone wallets if you have a backup of your wallet.dat file. If you don’t know what this is, go looking at your backups of the lost, stolen, or destroyed computer and see if you can find a wallet.dat file. If you have one of these, we can generally brute force the password on the file, assuming its length and complexity are not too great; this should be feasible. If the password is too long/complicated to brute force and you don’t have enough hints to provide for the password to make brut forcing possible, we can use the same options as a hardware or phone software wallet. Again, it would help if you had most of your recovery seed and preferably an address where you know funds are located.
What Can’t Be Recovered
- If you don’t have a wallet.dat file or don’t have most, if not all, of your seed words, unfortunately, your cryptocurrency funds are likely unrecoverable.
- If you have a wallet.dat file with an overly complicated or long password, your funds are extremely unlikely to recover as the computing effort would be too great coming at either too long of time or too great a cost.
- If you have a BIP32 passphrase with the same length and complexity issues, your funds are extremely unlikely to recover for the same reasons as a wallet.dat password
Best Practices for Cryptocurrency and Bitcoin Storage
While many bitcoin and cryptocurrency enthusiasts would say self-custody on a hardware or software wallet is the most secure and best, that’s only true if you are reasonably technical and have adequate safeguards in place. We think bitcoin custodian services such as Coinbase, BlockFi, and others are best for your average user as it allows them to manage the technical aspects of storage for you. There have been hacks of bitcoin exchanges in the past; however, we believe most high-quality custodians out there today are very secure and well insured.
However, if you do want to continue to self-custody your funds, here is what you minimally should be doing:
- Use a hardware wallet such as Trezor or Ledger.
- Make 2-3 copies of your seed words and double-check them against the device before sending funds to it. Store these copies in secure, geographically separate locations.
- For greater security, split the seed words into 2-3 sections (still maintaining 2-3 copies) and not store the full seed in any one location.
- Use a BIP32 passphrase that is reasonably complex and document this in a place that is also separate from the seeds entirely. The passphrase could be in a Living Will or Trust document or with a family lawyer.
- And finally, if you plan to store significant wealth in bitcoin and self-custody, we recommend getting the experts at Casa on your side. They offer even higher security levels than what we described above with multisig, a client advisor to walk you through the process, and estate planning.
What About Alt-Coins and Other Cryptocurrency?
We can often recover your Litecoin, Ethereum, and other cryptocurrencies in addition to any bitcoin we recover. Generally, most people use the same seed and passphrase (if one is in use) for their other currencies. So once we can access one wallet/account, sweeping other currencies is possible. Once again, the effort will be directly correlated to the information provided. If you know the coins and even wallet addresses, this can help.
How Much Do We Charge
We only charge for recovered funds. It’s generally a sliding percentage of the funds depending on the amount of effort (human and computing) the recovery will take, the odds of success, and the amount of funds we are discussing recovering. We are happy to consult with you for free regarding your bitcoin recovery needs and give you an idea of the possibility of recovery and the effort it would take. Never give your private keys or seed words to anyone offering to help you recover funds unless they are a reputable firm and you sign a contract with the company first (that includes us!)