Data and Credential Loss

When you forget that fancy password that you are remembering, or discard that old harddrive on accident you may lose access to the keys that control your cryptocurrency. This is another psychologically painful way to lose cryptocurrency, as there is the tantalizing possibility that the keys can be recovered if only the missing data is remembered or found. There are expensive hypnotists that specialize in helping desperate people recover forgotten passphrases.

Mitigation:

  • Redundancy: avoid any single point of failure. Forgetting one passphrase should not make a wallet unrecoverable.

  • Have a backup recovery plan.