by Amelie Arras
March 2021
If you’re new to crypto, the prospect of losing your wallet can inspire a sense of terror. We're here to help you.
If you’re new to crypto, the prospect of losing your wallet can be very scary. After all, it’s not like losing a bank card: in crypto there is no third party to whom you can appeal, no central office with whom you can arrange a shiny new replacement. With freedom comes great responsibility, and we’re here to help you right from the start.
The responsibility for protecting your digital assets is yours and yours alone. The truth is, though, losing your crypto wallet isn’t the end of the world. As long as you’ve backed up your all-important seed phrase (also called Private Key), you can regain access to your funds in next to no time.
If you’ve landed on this page, chances are you’ve either recently lost your crypto wallet – or are cynically fretting about such an event. Don’t worry, we’ve got you covered.
What happens if I lose my wallet?
Crypto wallets come in different forms. In the case of Zumo, we’re talking about a non-custodial wallet where the user controls their own private keys. In essence, this means Zumo can’t possibly access your funds. Losing your Zumo digital wallet, then, simply means losing the smartphone to which you’ve downloaded the Zumo wallet app.
Of course, if you’re using another wallet – a hardware wallet like Trezor, say – it’s possible to lose the actual device itself. However, this doesn’t mean you’ve lost the funds. After all, the digital assets aren’t stored on the hardware wallet – they live on the blockchain, and you access them via your private key (or the seed phrase that presents the private key). The wallet is simply the interface by which you can send and receive funds.
Whether it’s a hardware wallet or an application accessed via a smartphone or laptop, losing access to your funds can be a stress. Especially if you’ve switched off PIN access on the former or password protection on the latter. Theoretically, this would mean that a thief could open your wallet and, providing they know what they’re doing, dispatch your crypto assets to a different address.
When you set up your Zumo wallet, you’ll be asked to make a note of your seed phrase. Most people write this down in a notebook which they then keep in a safe place, though there are other techniques: memorising it, for instance, getting it stencilled onto a piece of fire- and flood-proof metal, or writing it down on separate pieces of paper then stashing them in different locations. The choice is yours – just know that there’s no “reset my seed phrase” option as when you forget an email password.
In any case, armed with your seed phrase you can set up a replacement wallet – all you need to do is import your seed phrase into the backup wallet and hey presto, you’ll see your balance. You can do this in advance or after you’ve lost your smartphone/hardware wallet.
Importing your recovery phrase to recover your wallet
If you’ve definitely lost your smartphone/laptop/hardware wallet, you’re probably going to replace it as soon as possible. Not least to regain access to your crypto, as well as your transaction history recorded on the blockchain.
The process by which you import a recovery phrase and resurrect a lost wallet is fairly typical regardless of the platform. It’s a case of going into the Settings menu and finding the ‘Import a Key/Wallet’ option. Simply type out your recovery phrase, click Import and you’re done.
Some users choose to save their key as a file or text backup, but the reimportation process is almost exactly the same. Instead of typing in the recovery phrase, there is an option to choose File/Text, whereupon the seed phrase is imported from the document in question.
You might wonder what happens to your old wallet when you enter your private key into a replacement. Isn’t it possible, theoretically, for someone to interact with your funds from the stolen device? Well, yes. Which is why you might want to sweep your private key into a brand-new public address in your replacement wallet. Ostensibly, this involves creating a transaction that drains the balance from the lost wallet, dispatching the cryptocurrency to a brand-new private/public key pair to which only you have access.
Losing your crypto wallet isn’t a catastrophe. Just make sure you’ve activated PIN access on your hardware wallet and have a strong password for your smartphone or laptop. The most important thing is to keep your private key safe, as losing this really will cause you a headache. Incidentally, there are dozens of dedicated wallet recovery services out there that help people recover access to password-protected wallets. But even these specialists won’t be able to help you if you’ve forgotten the private key. Keep a backup in a safe place and you’ll be fine, even if you do lose your crypto wallet.
