HOW CAN BITCOIN STORED IN DOWNLOADED WALLET BE RECOVERED?

[adultcrypto]

In search of a good wallet to store my Bitcoin, I have come across many recommendations like the ones from Ratimov, mk4 and others. I also understand the bold statement of "NOT YOUR KEYS - NOT YOUR COINS" that is visible in this  forum. Now I want to understand, assuming I downloaded for instance Bitcoin Electrum wallet and maybe someday they have a hack or something, will that not affect my Bitcoin? How can I recover my Bitcoin with my seed phrase in case of a breach of the Electrum system? Are these downloadable wallets truly decentralized?

Furthermore, can scammers create wallets that fall into these categories with the sole aim of stealing people's fund when they have gotten popular and the number of users they target?

Finally, my findings shows that Blockchain is one of the pioneer wallets that I thought was decentralized. I want to ask if they are still decentralized and if they are perfect for use? If no, what are the weaknesses and limitations that make people opt for other wallets.

Please pardon me if these questions do not meet your expectations.... I have fallen victim of centralized systems pretending to be decentralized before and this is why I am asking for clarification.

[Findingnemo]

Well, Bitcoins are not really stored in your wallets, it's in the blockchain and your wallet is just an interface to access it. In case if you lost the wallet due to data corruption, device lost or anything then you can simply import the same wallet into another device with Recovery seeds.

In case if someone hacked your wallet there is no reason for them to keep the bitcoins there and if still do then just create a new wallet and move whatever funds are left in there ASAP.

Blockchain wallet is non-custodial but its not really a best as you think. If are looking for alternatives to electrum then you can consider BlueWallet which is open source Bitcoin wallet.

[hosseinimr93]

Now I want to understand, assuming I downloaded for instance Bitcoin Electrum wallet and maybe someday they have a hack or something, will that not affect my Bitcoin?

Electrum is an open source wallet. The code has been reviewed by many people and no vulnerability has been detected. Your keys are stored locally on your device and they are not kept in any server.
So, we can be sure that electrum is safe enough (if it's used in the correct way). But take note that any online device is always prone to hacking. It's possible that your device is infected with a malware and it's compromised.
If you want to be completely secure, you should run electrum on an airgapped device, make your transactions offline and your keys should never connect to the internet.

[hd49728]

I also understand the bold statement of "NOT YOUR KEYS - NOT YOUR COINS" that is visible in this  forum.

Security checklist

Now I want to understand, assuming I downloaded for instance Bitcoin Electrum wallet and maybe someday they have a hack or something, will that not affect my Bitcoin?

If a wallet software is compromised, your bitcoin can be stolen if hackers can exploit the software database which has wallet seed phrases of all users and it is more related to custodial wallets. With  non custodial wallets, you are the only entity has access to mnemonic seed, private key of your wallet and a wallet software compromise will not affect you in theory.

However if such compromise is announced, you should respond first to move all bitcoin to a new wallet. You should never be lazy and just stay to wait more information. If in bad case, you are too lazy and too late, your bitcoin can be stolen by hackers too.

How can I recover my Bitcoin with my seed phrase in case of a breach of the Electrum system? Are these downloadable wallets truly decentralized?

Network is decentralized or centralized.

Wallet is only custodial or non-custodial. No centralized or decentralized wallets.

Custodial vs. Non Custodial Wallets - "Not your keys, not your coin" Explained.

[Peanutswar]

In search of a good wallet to store my Bitcoin, I have come across many recommendations like the ones from Ratimov, mk4 and others. I also understand the bold statement of "NOT YOUR KEYS - NOT YOUR COINS" that is visible in this  forum. Now I want to understand, assuming I downloaded for instance Bitcoin Electrum wallet and maybe someday they have a hack or something, will that not affect my Bitcoin? How can I recover my Bitcoin with my seed phrase in case of a breach of the Electrum system? Are these downloadable wallets truly decentralized?

With the use of the hot wallets, most likely it's just on the login only that there's a verification after that you can now access your wallet, if the hackers know your seed phrase they can easily use those to login into other device and use your seed phrase and steal your coins. Reason why electrum supported the use of the hardware wallet which like the Trezor and the Ledger, this wallet has another layer of confirmation for each login, and transaction so only in your device authorization can accept the transaction. If you have a budget don't conserve yourself to a layer of security.

[o_e_l_e_o]

Now I want to understand, assuming I downloaded for instance Bitcoin Electrum wallet and maybe someday they have a hack or something, will that not affect my Bitcoin?

If your computer is hacked, then your coins are at risk, as they would be with any hot wallet. If Electrum itself is hacked then nothing happens to your coins unless you download and install the malicious version, which you will never do provided you properly verify your downloads as you should.

How can I recover my Bitcoin with my seed phrase in case of a breach of the Electrum system?

If the Electrum website and GitHub are compromised, nothing changes with your wallet and it will continue to function normally.

Furthermore, can scammers create wallets that fall into these categories with the sole aim of stealing people's fund when they have gotten popular and the number of users they target?

Electrum is fully open source and reproducible, so we know there is no malicious code in it because we can read the code ourselves.

Finally, my findings shows that Blockchain is one of the pioneer wallets that I thought was decentralized.

This is incorrect. Blockchain.com is completely centralized. It is also entirely closed source. Being a web wallet it is also the riskiest type of wallet available, as well as suffering from a number of critical vulnerabilities in the past. No one should ever use it.

[Rikafip]

Furthermore, can scammers create wallets that fall into these categories with the sole aim of stealing people's fund when they have gotten popular and the number of users they target?

If you stick to popular open source wallets like Electrum that have been extensively tested by community, chances of that happening are slim to none.
 

Finally, my findings shows that Blockchain is one of the pioneer wallets that I thought was decentralized.  I want to ask if they are still decentralized and if they are perfect for use.

That's one of the worst possible wallets that you can use since you don't own private keys meaning you don't even own crypto that you store there.

[robelneo]

Furthermore, can scammers create wallets that fall into these categories with the sole aim of stealing people's fund when they have gotten popular and the number of users they target?

It's possible for a new, custodial, and closed-source wallet, so go with a highly reviewed, noncustodial and open-sourced wallet and you are good to go and never use an exchange wallet as storage too.

Finally, my findings shows that Blockchain is one of the pioneer wallets that I thought was decentralized. I want to ask if they are still decentralized and if they are perfect for use? If no, what are the weaknesses and limitations that make people opt for other wallets.

I advise that you do not use that wallet there are a lot of issues with this wallet, Electrum, and hardware wallets are still the best, I totally discard this wallet, a web-based wallet has a risk attached to it, There was a time that confirmation did not arrive luckily I have the private keys extracted so I move out my coins.

[Plaguedeath]

Don't use web wallet or hot wallet, use hardware wallet or cold storage where it's not connected with internet. If your coins gone, you can't recover it since Bitcoin transaction is irreversible.

That's one of the worst possible wallets that you can use since you don't own private keys meaning you don't even own crypto that you store there.

There are two versions:
1. The web wallet that integrated with exchange which is their old service and most of people know about blockchain.com
2. The another one is non custodial wallet where they give you private keys https://www.blockchain.com/wallet

But it's not recommendable due to closed source and lack of many features compared to Electrum.

[Dunamisx]

assuming I downloaded for instance Bitcoin Electrum wallet and maybe someday they have a hack or something, will that not affect my Bitcoin?

If your bitcoin wallet is hacked, then it's as a result of how you handle your private keys or maybe your device got infected with malicious malware maybe through what you downloaded, once the hackers get hold of your wallet, they move out all your funds leaving nothing left ad once this is achieved, there's nothing you can do to have a recovery of your funds back as long as the transaction is confirmed.

How can I recover my Bitcoin with my seed phrase in case of a breach of the Electrum system?

If in this case you're not hacked, then it's very simple, redownload electrum or use another device to install it, we normally encourage doing this on airgapped device, which has not internet connection with other sites, then recover your wallet by giving your seed phrase to bring up your wallet.

Are these downloadable wallets truly decentralized?

Electrum wallet is an open source non custodial bitcoin wallet, it's a decentralized wallet under cold storage, there are some that are not decentralized.

Furthermore, can scammers create wallets that fall into these categories with the sole aim of stealing people's fund when they have gotten popular and the number of users they target?

Yes, they can go to any lent just to launch an attack on their victims, you must ensure to download your intended wallet from the verified official website, dont reveal your informations online and maintain a good security practice to be safe from any attempt from hackers hunting around.

[Rikafip]

Don't use web wallet or hot wallet, use hardware wallet or cold storage where it's not connected with internet. If your coins gone, you can't recover it since Bitcoin transaction is irreversible.

Hot wallets have their use, for example when you need a wallet that you will use on a daily basis and where you won't hold more than few hundreds off dollars worth of bitcoin.

Problems start when people use hot wallets to store larger amount of crypto which is extremely risky and accident waiting to happen.

[BitMaxz]

Finally, my findings shows that Blockchain is one of the pioneer wallets that I thought was decentralized. I want to ask if they are still decentralized and if they are perfect for use? If no, what are the weaknesses and limitations that make people opt for other wallets.

How did you obtain this information? If you don't know what blockchain is, it is where all Bitcoin transactions are recorded. You might be just heard blockchain to any site and social media but Blockchain.com is only a blockchain explorer that offers a web wallet and their wallet is not as safe as Electrum. They have many issues with their wallet that have yet to be resolved. So you shouldn't use a blockchain wallet; instead, use Electrum, create an offline wallet, or purchase a hardware wallet. Then learn how to make raw or offline transactions, which are far safer than using an online device or a web wallet that stays connected to the internet.

[Faisal2202]

I downloaded for instance Bitcoin Electrum wallet and maybe someday they have a hack or something, will that not affect my Bitcoin?

If the wallet where you placed BTC is hacked then the chances are high that your Money or BTC will be affected because hack means the hacker has unauthorized access to your account and now if you have not set the multisig or any other 2FA security option then it become a streamline pathway for hacker to send your BTC into his/her account. Means your assets will be gone.

How can I recover my Bitcoin with my seed phrase in case of a breach of the Electrum system? Are these downloadable wallets truly decentralized?

You need a seed phrase or private key which they will provide you while creating the wallet and you can use those keys to recover your account. That's why they used to say "Not your keys, Not your Coin".

Furthermore, can scammers create wallets that fall into these categories with the sole aim of stealing people's fund when they have gotten popular and the number of users they target?

Yes, Hacker or spammer will try to clone the original app or wallet to lure you into thinking that it is the real wallet like the last phishing hack in electrum wallet.

No comment for the last question of yours. Let's hear it from others.

[Coyster]

Electrum wallet is an open source non custodial bitcoin wallet, it's a decentralized wallet under cold storage, there are some that are not decentralized.

Mind you that wallets are neither centralized or decentralized, they are both inappropriate terms to use for wallets, they are either custodial or non-custodial. Electrum is open source and it is non-custodial, but it is not "under cold storage", it is a hot wallet and is vulnerable to hacks, though you can create your Electrum wallet on an air-gapped device and anyone using Electrum to hold a large portion of their stash should consider doing that.

[BIT-BENDER]

Your private wallet is different from exchange, you would have an issue you should worry about if you have your coin stored on an exchange and the exchange get hacked, but I am yet to see anyone who complained that they lost funds because private wallet like Electrum got hacked. The chances are very slim for this to happen.

And I think your personal information like seed phrase or passway would be compromised or available for anyone to see if electrum get hacked.

[hosseinimr93]

but I am yet to see anyone who complained that they lost funds because private wallet like Electrum got hacked. The chances are very slim for this to happen.

There are many cases in which electrum users have lost their fund, but none of them has been electrum's fault.
Note that even if you use an open-source trustworthy wallet like electrum, your wallet can still get hacked, in the case it's online.

[lovesmayfamilis]

Always download the correct version of the wallet from the official website, https://electrum.org/#download. Add this site to your browser favorites to prevent accidental downloads from a phishing site. Do not rush to update the wallet if you see a pop-up message asking you to do so. Instead, visit the site, check the version, and after downloading a new version of the wallet, always check the signature. If you are confident in the security of your device, you should not expect trouble from the wallet itself, since its open version allows users to always monitor its security.

[aysg76]

Always download the correct version of the wallet from the official website, https://electrum.org/#download. Add this site to your browser favorites to prevent accidental downloads from a phishing site. Do not rush to update the wallet if you see a pop-up message asking you to do so. Instead, visit the site, check the version, and after downloading a new version of the wallet, always check the signature. If you are confident in the security of your device, you should not expect trouble from the wallet itself, since its open version allows users to always monitor its security.

Right as we have seen in past from the fake trezor suite where phising links were sent to users and asked to update the wallet entering their seeds which was scam and many people lost millions of dollars.So don't be in a haste to do such things and always double check whenever dealing in these things and do it from trusted sources only.

[Upgrade00]

assuming I downloaded for instance Bitcoin Electrum wallet and maybe someday they have a hack or something, will that not affect my Bitcoin? How can I recover my Bitcoin with my seed phrase in case of a breach of the Electrum system? Are these downloadable wallets truly decentralized?

They are open source and do not store your seed on their servers but do that locally, so a hack on their end will not affect you except they change their code which will be visible to everyone. If your local device is hacked you are at a high risk of getting your funds stolen.
All downloadable wallets are not the same, they have to be open source and non custodian and even at that there are levels to decentralization.

Furthermore, can scammers create wallets that fall into these categories with the sole aim of stealing people's fund when they have gotten popular and the number of users they target?

Yes, we have had a couple of wallets which have been responsible for hacks.
Always ensure that the wallet you're using is open source.

Finally, my findings shows that Blockchain is one of the pioneer wallets that I thought was decentralized. I want to ask if they are still decentralized and if they are perfect for use? If no, what are the weaknesses and limitations that make people opt for other wallets.

They are not decentralized and you can't verify their code, this makes it unsuitable for use.

[o_e_l_e_o]

That's one of the worst possible wallets that you can use since you don't own private keys meaning you don't even own crypto that you store there.

Blockchain.com does in fact give you a seed phrase you can import elsewhere to access your private keys. It is still a terrible choice of wallet, though, since we have no idea how that seed phrase was created or who else has access to it, never mind all the other points I mentioned above.

Hacker or spammer will try to clone the original app or wallet to lure you into thinking that it is the real wallet like the last phishing hack in electrum wallet.

They can't clone GPG signatures. If you spend the few seconds it takes to actually verify your downloads (as everyone should be doing), then you will literally never fall victim to such a scam.