The rapid acceleration in the price of bitcoin in 2017 has had holders mesmerised. The asset’s soaring value has sparked renewed interest in many old assets holders with wallets containing digital dust worth a significant amount. This has prompted the search of passwords and key phrases.
If you look around, everyone’s got a bitcoin hard luck story to share, whether it’s selling too early or suffering a hack. However, one of the most frustrating situations could be forgetting your bitcoin wallet key altogether!
In bitcoin’s earliest days, they were easier to come by, and not much attention was paid to a few fractions of a bitcoin left lingering in one forgotten wallet. Few years later, those fractions of a coin are worth more than tens of thousands of dollars.
Numerous tales have emerged of account-holders driving themselves insane trying to recall the passphrase for a wallet they haven’t accessed in years.
Bitcoin carries out transactions with the help of cryptography. The system functions by using two pieces of information to authenticate messages — a private key and a public key.
What are these keys?
A public key essentially identifies a recipient or sender, and can be distributed to others. A private key is used together with the public key to create an unforgeable message signature. The private key must be kept secret.
A Bitcoin private key is simply an integer between one and about 1077.
What happens if you forget your bitcoin wallet keys?
This vast keyspace plays a vital role in securing the Bitcoin network and the transactions that take place within this huge network.
These private keys are mostly encrypted and are required to be kept a secret. With encryption, the private key can only be deciphered with the help of the password that was set during the encryption process.
Transactions are essentially messages signed with a private key that authorizes them. This is done to prevent forgery. Without the correct private key it is impossible to fake transactions.
Wallet software carries out transactions by generating a digital signature by mathematically processing a transaction together with the correct private key.
A transaction signature differs from a physical signature on a cheque. A transaction signature changes if the transaction changes even slightly. Safety is ensured as the way the signature changes is unpredictable, ensuring that only a person in possession of a private key can provide the correct signature.
If you forget your bitcoin wallet keys, you would lose access to all your bitcoin. Also, a potential risk of your funds being stolen could loom over you!
Private keys should therefore be kept secret. It is important to select the private key carefully as it could lead to theft just as easily as its accidental release.
Many software wallets support sweeping. A sweep basically ends up creating a new transaction paying one of the software wallet’s existing addresses.
To avoid losing your wallet keys, it is imperative to create a backup of your Bitcoin wallet. Should you forget your Bitcoin wallet keys, you could approach your company for the recovery process, however, you need to have a good idea of your initial password and see if the process works for you.