Lost Phrase = Lost Crypto? Forever? Really?

English General Discussions
1

Dear Community,

It is my understanding that if a person loses their seed phrase to recover their wallet - the crypto becomes lost forever? I am NOT having this issue, but I do have some questions, concerns, and ideas:

1. The Crypto still exists somewhere, right? - - - The seed phrase for a wallet helps restore the crypto contained. And I am aware that you can restore your Daedalus wallet through Yoroi. So, unless you used a cold-storage wallet - the funds/crypto do exists somewhere, right?

2. “Blacklist” for Inactive or Lost Wallets - - - Could there be a mechanism in which users who have lost their wallet phrase can add the wallet address to a sort of “blacklist”? A gathering of addresses that have been locked or lost. Then, in some point in the future, the community can decide what to do with the gathering of inactive or lost wallets?

3. Lost or Locked Wallets Get Transfered into Treasury - - - Could there be a mechanism in which all locked or lost wallets get aggregated into the Treasury? After, say, 5/10/or 15 years of inactivity or being locked - - - the funds could go back into the treasury? Should there be a mechanism to retrieve these lost or locked funds?

I’m not sure about the technicalities of wallets. But storing crypto seems like a game of not “getting caught with your pants down.” (e.g., lost phrase, nonupdated system, etc.) And crypto trading seems like a game of “hot potato.”

In My Mind: Cryptos like ADA/Cardano strive to exist for many years, but I find it hard for future people to want to get involved if many crypto is lost or locked forever, before they were even born.

For instance, there will only be 21 Million Bitcoin - but 10 to 20 years from now - - - do people really want to use/invest in Bitcoin if the majority of the crypto has been lost or locked forever? I know this impacts the “supply vs demand.” I know less supply usually equates to more demand - but I find it hard for future generations/users to demand a short supply - especially when it comes to infrastructure and mass adoption - many people do not want to play a boardgame that is missing pieces.

Conclusion: I do not intend to annoy. It just seems like the crypto community can find a better balance between anonymity, immutability, and sustainable systems. This notion of, “I lost my wallet phrase, oh well, it’s gone forever!,” does not sit well for me.

Thank you for your time, patience, and understanding.

EDIT UPDATE: Similar thread located at - Suggestion to add in a feature that could make cardano even more unique and future proof

2

Metaphorically, you go to a desert and dig a hole to put your money in. Then write down the coordinates and go home. but you then lose the coordinates. your money is still there but you can’t find it. With crypto that desserts is many many many times larger and your seed is your coordinates. Don’t lose them.

And in the same way, you can also lose a very expensive diamond. Well if it can’t be found it’s lost. Just like lost crypto.

Financial freedom comes with financial responsibility.

2 Likes
3

Dear @ADA4Good ,

Thank you for your prompt reply! Thank you for that metaphor.

So, the expensive diamond (crypto) is still out there in the desert, good to know - that is where the “blacklist” idea comes from.

The diamond is still in the desert - the original owner lost the coordinates - the owner submits the coordinates to a list of other lost diamonds - - - - then maybe a solution?

In the real world someone else could come along and dig up the diamond. In the digital world, are we going to have buried treasure all around and no way to get to it?

I am very interested to see how crypto is/will impact Property Law.

It still seems hard for me to see future people wanting to build their investment or infrastructure on a continuously shrinking supply.

Every address is on the blockchain, right? So, the crypto is not lost really - only the shovel to dig it up.

1 Like
6

The crypto is in the blockchain not in your wallet, therefore it cannot be lost. The wallet is only a browser that lets you comfortably read in the chain and do transactions using password/signing key belonging to your address.
The blacklist could be little tricky. You need to prove the address you want blacklist belongs to you and for that you need - the phrase/signing key.

2 Likes
7

Hey @True2me4you
i think this is an very important question.
Many things already stand in the other thread you have found. So i try to answer short:

  1. yes they exist for ever. Ok forever means that the whole network is online for 24/7 and the data will never be lost. (Worldwide blackout and destruction of every data storage?) In fact the crypto never leave the blockchain. The wallet just show you which crypto you can use.

  2. I think no, because a wallet cannot be connected to one person. So how would we know that not a troll want to blacklist the wallet of other persons?

  3. Technical it isnt possible. The extendet UTXO modell is the “problem”. You cannot say which coin is in one wallet like on ethereum. You cannot even say how much wallets exists on cardano. The other problem is that you need the secret key to confirm any transactions. Because no one have it, no one can confirm the transaction that it would be accepted from the blockchain.

Just to say it: it is possible to find you cryptos again.
You could brute-force your own seed phrase. :joy: Like it was mentioned by @ADA4Good you could dig everywhere on the world an then you found it.

To adress something on the problem: If you have lost you seed phrase, you maybe still have acces to you wallet. Then you just open up a new wallet and transfer it to he new one.

Greetings from Germany!

5 Likes
8

Regarding this question:

One can create such a “wallet” that stores funds at a script address and allows one to freely spend using one’s private key(s), but which also “opens up” the wallet after (say) 15 years to be used by a list of other addresses (family etc.) or even by anyone at all, but this would require that the script is published so that folks know how the funds can be retrieved at that late date. When smart contracts are available, one could similarly create a contract that “opens up” after a given period of inactivity (not just at a fixed future date).

Also there are several related ideas on Cardano Ideascale for recovering or inheriting wallets.

1 Like
9

The short answer is Yes, the crypto still exist somewhere in the blockchain.
You just need to reminder the seed password to retrieve it. If your wallet is open you can create another wallet and transfer it to the new one. Always save your seed password somewhere safe.

1 Like
10

One of the main points of cryptocurrencies is that you should not under any circumstances be able to calculate some else’s private keys.

Your only way to get it would be to find the sender and probably threaten them with bodily harm until they give it to you. Or find some security weakness that allows you to access their computer and steal the key from them, hoping that it’s not encrypted.

12

@Stephanie_Robert, did he try to guess your password? I can’t imagine one can guess your recovery phrase since there are just too many combinations.

Be careful for scammers… Always… Everybody included.

1 Like
13

I am sorry to say, but you tick all my boxes for a scammer.

2 Likes
14

Noone can proof that he is owner of the coins, if the keys are lost. So i guess, no. A “if 80years not moved, coins go to a community pool” rule is technically possible in a protocol. Yet i guess most holders would not want this.

Every cryptocurrency is just virtual. And you can devide the existing coins by any number you like. e.G. you can subdivide bitcoins further. Then create a name for the subdevided coin. In the first 40years we moved 1BTC. Now (40 years later) we move more 0,001 of a BTC. Lets give this amount a new name like 1 BTCS. Everything was virtual from the beginning. Why wouldnt people continue to use it? Apple stock is traded, even after the 2nd split of apple stocks. No problem.

1 Like
17

Here are some tips on how to split the seed phrase and make a robuust backup of your seed phrase: Seed phrase wallet backup template - Google Docs

1 Like