Erik Weijers, 4 months ago
Almost two-thirds of Dutch crypto owners do not have a backup of their crypto wallet. That is one of the interesting results of Multiscope's Cryptovaluta Monitor.
Multiscope does online market research and has published about the Dutch crypto market before. For example, their Summer 2022 Monitor showed that nearly 2 million Dutch people own crypto.
'With great powers come great responsibilities'. After you purchase crypto, you really have ownership over your money. Especially in the case of Bitcoin, there is no - or at least less - counterparty risk, which is not the case with traditional money. After all, money in a bank account is not legally your property. True, the government does guarantee balances up to a certain amount, but this proves all the more that a bank cannot guarantee that your money is safe there: only a fraction of outstanding balances are owned by the bank.
So much for great powers: what about responsibilities? Not your keys, not your coins, after all. If you have your crypto outstanding with a crypto broker or exchange, you have no more guarantee that your coins are safe there than money in a bank. That's why many crypto owners choose to keep them in self-custody. That amounts to keeping your password safe, also known as a seed phrase.
But your own responsibility doesn't stop there. Because a paper-based password can be lost, or it can burn in a fire or get water damage. You can fix that vulnerability by storing a copy of your seed phrase elsewhere. The research shows that two-thirds of Dutch people don't do that.
A vast majority (60%) of crypto owners have no more than one wallet to store their crypto coins. That could mean they either have everything on a single crypto exchange, or have their own wallet but without a backup.
A few more related facts:
Except for the occasional gold fanatic, keeping your money in your own wallet is a new skill for people. As such it is understandable that many people are still vulnerable in this regard. But especially with larger amounts - and what are currently small amounts may be large amounts in a few years - it's worth thinking about backing up your wallet. And about scenarios in which you can no longer access it yourself – indeed, the scenarios you’d rather not think about...
May 16, 2023
Creating reliable backups of one’s hardware wallets is perhaps the most important thing. This is usually done by writing down a so-called seed phrase consisting of 24 words. Losing this recovery phase means losing access to the wallet if it is lost or physically damaged. A couple of methods are available to ensure the seed is kept safe. Some users go so far as to engrave them in steel plates to make them fire and waterproof.
May 16, 2023
Hardware wallets are the top-notch solution to keep cryptocurrencies and NFTs safe and sound. The devices are designed to provide a secure environment that is immune to remote access by any attacker. Therefore, most influencers, the broader media, and crypto communities recommend using a hardware wallet. Especially beginners are being told to use them to store their crypto. This is only sound advice given the fact that crypto worth billions of dollars got lost since the inception of Bitcoin.
Apr 20, 2023
Bitcoin transactions are not anonymous. Its blockchain is public and all transactions can be audited at any time. This is not a bug but a feature because only if every person in the world can audit every detail, then Bitcoin becomes a truly decentralized and secure digital form of money. This transparency also comes with a downside. Unlike a bank account, any company can watch the blockchain for activity and use the data for all kinds of purposes. One specific technology has been thought of several years ago to improve the situation.
Apr 19, 2023
Security is important when dealing with cryptocurrencies. All transactions are final and investors should always take into account that not everyone out there on the internet is being honest. Decentralized finance is especially vulnerable since many smart contracts are at work and one single line of buggy code can expose millions. This explains why so many exploits have happened in the past with so many different protocols throughout several blockchains. However, the most recent incident cannot be attributed easily.
Sign up to stay informed via our email updates