We know how hot wallets are vulnerable to an external hacking job. Since it’s connected to the internet, hackers get ample opportunity to steal the Private Key and eventually the cryptocurrencies. In 2018 alone, cryptocurrencies worth $1.1 billion was reported to be stolen. With increasing sophistication, of the blockchain technology, hack jobs to are getting advanced. Cold wallets, the most secure of the lot does not find too many takers though. The advantage of easy access and quick turnaround, usually associated with the cloud, is a trump card no one wants to give up on.
How to retrieve the stolen Bitcoin?
Now that’s a billion-dollar question. Ideally, a stolen bitcoin or any cryptocurrency for that matter needs to accepted as lost. Forever. However, there might still be a sliver of hope. Just a sliver, that is.
In the case of hot wallets, users usually set them up with exchanges. But that would in no way ensure a foolproof environment. These are online exchanges connected to high-speed internet and enjoying all the perks, technology keeps coming up with. A hacker can easily exploit weaknesses in the security of these exchanges and break-in.
In such cases, it is the responsibility of the exchanges to retrieve the coins back. But then that would be done.
Bithumb was hacked in June 2018. However, it was later learnt that it could recover almost 50% of the lost coins.
If this is taken as a thumb rule, you are mistaken. It is more of an exception. Once lost is lost forever. That’s the maxim for hot wallets.
Cold wallets are impossible to hack.
The reason is their independence from the world wide web. However, the onus for the security of cold wallets is upon the users, themselves.
You have written all the relevant details on a piece of paper. Nobody has access to it, excepting you. And you lose it. The ideal way to keep the information safe is by making a few copies and keeping it in different safe places.
Pen Drives and Hard Drives Again, safe from hackers but not from a crash. Pen drives and hard drives are prone to get to getting corrupted. In that case, retrieval experts have to be roped in to recover lost data. An expensive affair, but if millions are at stake, worth every penny.