Anyone who keeps Bitcoin themselves knows how important it is to keep their private keys in the form of the recovery phrase (also called seed phrase). Without it, you cannot recover your wallet and thus the Bitcoin managed in it. However, the seed phrase is not the only password you need to remember. On your Bitcoin journey, you will quickly realize that you need a password for your Bitcoin broker, sometimes a password to unlock your wallet, and possibly a password to store all this data and backups.
All these different passwords can quickly confuse you. But it's not impossible to keep them safe if you stick to the following four points:
The good thing about this process is that it is always the same. You always need to remember the Bitcoin broker's password, the wallet seed phrase, the wallet password and keep it safe.
The credentials for the bitcoin broker are important, as it is your partner to conveniently buy Bitcoin. Fortunately, you have several options here to get the credentials. For internet or platforms, it is generally beneficial if you get a password manager. These encrypt your data and allow you to create long, strong passwords. Once you create an account for a Bitcoin broker, that would be the best place to store that data.
It is important to choose the right partner for storing these passwords. Especially recently, one reads again and again how the major providers have fallen victim to phishing attacks. It can be worthwhile to select a provider that only operates offline and whose source code is open to all (open source). Solutions like Dashlane, Bitwarden or KeePassXC good options.
Besides the Bitcoin broker the wallet encryption is probably the most important bitcoin password. We are NOT talking about the seed phrase of your wallet here, but a password that you enter to get into the wallet or to confirm a transaction. Similar to a smartphone, this is the code you enter to use the wallet.
All passwords that lead to direct access to your Bitcoin should be stored offline. We want to prevent anyone from gaining access through any backdoor. Even if the password manager is secure, there may be a Trojan sitting on the network or someone else gaining access to the internet connection with your device. Therefore, we always want to handle all issues concerning your bitcoin wallet offline.
You have two options for the wallet password. Either you write it down and store it in different places. Or you can use a metal backup solution. These are ideal because you can engrave the passwords in metal and keep them forever.
Although the seedphrase is not a password in the classical sense, it plays an enormously important role for Bitcoin investors. With the seedphrase you can recover your wallet. It usually consists of 12 or 24 English words. Your private keys can then be derived from these easy-to-read words.
However, this also means that someone who has access to your seedphrase also has access to your Bitcoin. Therefore, it is important to keep your wallet seedphrase safe offline.
Now it can happen that you forget to save or remember the access data in the password manager and lose access to your Bitcoin broker.
At Coinfinity we have positioned a "forgot password" button on the login screen. Once you click on it, you will be redirected to a recovery page.
Enter the email address by which you're registered here, and we'll send you instructions on how to create a new password.
If that doesn't work, you always have the option to talk to our support team. To do so, send us an email to firstname.lastname@example.org.
Forgetting your Bitcoin wallet password is a serious matter, but it does not mean that you have lost final access to your Bitcoin. As long as you know the private key of the wallet, you can usually recover it.
Most wallet providers allow a complete reset of the wallet. Usually it is enough to delete the app completely from the device and then reinstall it. Once this is done and you open the app again, it will ask you for a new wallet password. Once this is set, you will see the option to enter a seed phrase. After that, the wallet will be synced and your bitcoin holdings will be displayed correctly again.
Even if this sounds crazy at first, you don't have to worry. As long as the wallet allows you to write down or export the private key, you can usually restore it. After all, your coins are not stored on the device or app itself, but are registered in the public ledger of the Bitcoin blockchain. Depending on how many transactions you have performed, the synchronization may take longer. However, as soon as this is completed, you have access to most wallets again.
Unfortunately, there are some wallets where you cannot access your coins if you forget your wallet encryption password. However, this is usually only the case with older Bitcoin wallets.
A metal back-up solution is probably the safest way to store your passwords or private keys for the long term. There are several different types. The simplest are solutions like Seedor. This is a capsule with a screw in the middle where you can store your passwords in small slices. They also have a starter set, which is easy to get started with. You can buy the set here.
A similar solution is the ultimate back-up package from Shift Crypto. In this set, you not only have the metal plate, which you then stamp your passwords on, but also paper solutions and even tamper-proof bags. You can buy the set here.
Even though the metal solutions are great, it is beneficial to have multiple copies of your passwords. So it doesn't hurt if you also write down the backups by hand and then laminate this piece of paper or cardboard. This way you always have a metal and paper backup and can keep them in different places.
It doesn't have to be a safe in another country, but it helps if you get a safe for your home. You can then store part of your passwords in it and leave the other part with a family member, for example. It is important that you can trust the people with parts of your passwords 100%. If you are not completely sure, leave it rather with your own copy.
If you don't want to settle this within the family, you could talk to a lawyer or notary as an alternative. It is important not to have everything in one place and to minimize the risk by distributing the individual solutions. However, this of course also increases the risk due to multiple points of attack.
The bitcoin wallet password gives you access to your wallet and serves as protection. Similar to a cell phone, it's the code you enter before you get into the device. A strong bitcoin wallet password helps you protect your bitcoin.
Depending on the wallet provider, you can either change the password directly in the app or reset the wallet by performing a recovery.
As long as you have the private key, you can usually recover your Bitcoin wallet. However, in a few cases, you may no longer have access to your coins if you forget the wallet encryption password.