Bitcoins Once Lost is Difficult to Recover
The traditional versus cryptocurrency comparison is an unending topic. Both of them have their pros and cons. Traditional currencies like notes and coins have their flaws like the notes can be damaged if they come in contact with water or are not handled properly. While the cryptocurrencies being digital assets does not have these issues, but if compared the traditional currencies when lost or damaged can still be recovered while the cryptocurrencies when lost are highly likely to be lost forever. The analysis says that a total of 20% Bitcoins are lost and is unlikely to be recovered, though it does not make a very huge impact on the overall cryptocurrency market, it certainly does affect the individual investors. Here is what you should know about the security of Bitcoin and other cryptocurrencies.
1) Cost of Security: Storing the Bitcoins is not the same as storing the traditional currency. Bitcoin tokens that are encrypted and protected by cryptography are stored in the digital wallets. These digital wallets are only accessible by the private key and hence can be operated only by the private key holder. This is designed to protect the Bitcoin been hacked by anyone else. But if this private key is lost it is very difficult and almost impossible to retrieve the Bitcoin. Many investors tend to seek help from wallet hunters that aim to help the investors to recover their lost keys. These hunters usually charge a fee of 5% to 40% of the recovered coins which is quite a high fee.
2) Trading Software: Many users have lost their Bitcoin and money using fake trading software that is available in the market. One of these is the Crypto Trader software that claimed to return good profits but did not work as expected. Refer to the website to know expert reviews on various trading software in the market before you choose to invest in one.
3) Broader Impact is negligible: Though around 20% of overall Bitcoins are lost in the process, the broader impact is very negligible. Bitcoin can be divided into smaller denominations easily as compared to the traditional currencies and hence prevents from having a greater impact on the overall currency. Even though the miners are said to reach the Bitcoin limit very soon, it is highly likely that more and more Bitcoins tokens will be lost in the future too. Though this is not helpful for people who have already lost their tokens, it is at least not going to impact the currency overall.