8 Simple Steps to an Effective Bitcoin Recovery Strategy

Bitcoin has risen in popularity over the past few years as an alternative to government-issued currencies, especially in online transactions. If you’re one of the many people who hold bitcoins, you’ve probably considered how you would go about recovering your bitcoins if they were lost or stolen. Here are eight steps that will help you determine your own bitcoin recovery strategy to give you peace of mind in the face of any bad situation involving your bitcoins.

Step 1: Back Up Your Wallet

It is easy to make the excuse I don’t have any valuable bitcoin so why bother? However, a recent Reddit thread demonstrates that we often underestimate how important data backup is. To back up your wallet, simply make sure that you can still access the files on your computer. You will need a hard drive and preferably a USB drive or flash drive with sufficient storage capacity. Save any file extensions .dat .keys .prv .wallet etc., in this order, one folder deep.

That way if you happen to lose all of your data because of a virus attack or hardware failure, these files will be there for you. If your wallet was encrypted, be sure to enter the password into the password field when saving it!

Step 2: Protect Yourself From Theft and Corruption

A good place to start is to set up a safe storage solution for your bitcoin. We’ll list some of the various ways you can protect your coins from theft and corruption below:

• Keep them on an offline wallet on a device that’s not connected to the internet. You can take advantage of external hard drives, such as those made by Western Digital or WD, or plug in the one you may have on your desk right now that you use for work.
• This will save significant wear and tear on your computer and avoid any viruses that may come along with files saved online. Be sure never to share these drives with other people who could gain access to your bitcoins.
• Use a mobile wallet like Coinomi. With Coinomi, your private keys are encrypted using AES-256 encryption to ensure security against malware and hacking threats
• Get a hardware wallet similar to Trezor or Ledger Nano S and many more.

Step 3: Be Careful with Third-Party Services

Third-party services, such as storage wallets, offer a convenience that should be used sparingly. Given the current lack of regulation for cryptocurrencies, your funds are not insured by these third-party companies. There is also no guarantee that a provider will be around when you need them most. So, before you invest any significant amount of bitcoin in third-party providers be sure to ask them: 1) what are their security standards; 2) how they maintain their holdings; 3) how they update records after transactions are made; 4) what information is provided if there is a recovery request, and 5) do they have procedures in place for suspending access to accounts after violations or emergency situations.

Step 4: Secure Your PC

Do not leave your computer unsecured. Without physical security, no matter how many anti-malware programs you have installed, it’s only a matter of time before a cyber-criminal can easily access your personal information and steal bitcoins. Make sure you update your operating system with the latest patches from Microsoft. In addition, install up-to-date malware detection software on your PC. Use a good password manager such as KeePass or LastPass to generate long, complex passwords for each of your accounts.

Finally, use two-factor authentication whenever possible – this is when you need to enter two different pieces of information in order to log in: typically a username and password plus another piece like one-time codes or biometrics (e.g., fingerprints).

Step 5: Use Passwords, Pins, and Biometrics Wisely

Passwords and pins, if correctly set up, are the most common form of security. Utilizing this feature may require a little bit of research, but can provide significant protection against hacking and unauthorized access. For example, if you keep your bitcoin investment in a more traditional bitcoin wallet like Armory or Electrum then it is essential that you use a strong password with adequate password length and type of characters. (Tips: Always use a long list of special characters— at least a few special characters such as !#@&*()_+, to create a strong password that includes different types of characters; do not use words found in any dictionary because it is easy for someone with computing power to search for and guess your password)

Step 6: Send Out Your Bitcoins

Your wallet is what stores your information about your coins, including their balance. Sending a bitcoin out of your wallet causes the transaction to be broadcast across the entire network. In other words, the entire system knows that you sent bitcoin from one address (or person) to another address (or person).

To retrieve a lost coin in this way, you will have to discover its corresponding public address—which should not be difficult if you know where and when you generated it.

It’s also worth noting that anyone who knows its public address can see how many bitcoins are stored there and when they were sent or received—though they cannot see any information related to any other addresses or transactions.

Step 7: Keep Track of Transactions and Balances

Keeping track of all of your transactions is important. If you want to use a spreadsheet or any type of record-keeping system, that’s fine, just make sure it has columns for the date and transaction ID so you can look up the transactions. If you don’t have a system in place already and you realize that there are transactions missing, you should immediately contact your wallet provider for their records. They may be able to help recover funds if they haven’t been sent out yet.

However, even if they’ve already been transferred off the blockchain, your wallet provider may be able to help establish where they went from your records with which address sent them out originally, and maybe track down who received them with some additional cooperation from whoever is holding onto those coins now.

Step 8: Keep Up To Date on Security Procedures

If you want to be successful with your bitcoin recovery strategy, you need to keep up with the latest news. Websites like CoinDesk are a great resource for all of the latest news in cryptocurrency and security, as well as getting in-depth technical analyses on what is happening with digital assets like bitcoin. The site provides information about cryptocurrencies, blockchain technologies, and more. What you learn will not only make you aware of what’s going on but it will also teach you some of the best practices for securing your bitcoins.

Conclusion

If you’ve been wondering how much bitcoin is worth or if you’re considering investing in it, remember that the crypto market is volatile. But if the worst-case scenario does happen and your bitcoins get lost or stolen, these are some of the simple steps for what to do next. First of all, don’t panic about it. There’s no need to make a rash decision based on emotion rather than logic.