Can highest security, actually Increase the Chance of permanent Loss

[Asuspawer09]

This wasn't in my opinion about the security thing, there are wallets that have advantages when it comes to security and there are surely more secure compared to using the traditional ones. Also, we have custodial and non-custodial accounts that might have some kind of trade-off depending on the users. But this doesn't change anything about it, since if the wallet is more secure, then it is. In this case, it is just a matter of human error here his the one who loses the password of the iron key. Thats his mistakes not a mistake of the security, it wasn't lost because it is secured. I guess we have something like convenient or backup, but we already know that, he should back up the key if he knows what he's doing, if he doesnt have that, then this was all his mistakes.

You might be right in some situations, since on a lot of platforms you could easily recover your password on your wallet in case you forget about it, you might easily recover that, but it wasn't the rule, and he just didn't follow the precautions, no backups, plus losing the key.

[KataifiDream]

I was reading a case about Stefan Thoman, who lost the password to his Iron key, which holds 7,002 btc in it and he had 10 chances and used 8 already. Now he is finding ways to recover the password.

It raises a question about self-custody that, can the highest security actually increase the chance of permanent loss?

I am not saying security is bad, but saying it has tradeoffs and in bitcoin there is no password reset. Because this device is not a normal device, but maybe if Stefan had held those btc in a normal USB or a reliable storage device, maybe he would have those btc now.

My take is to that question is no. Highest security doesn't increase the chance of permanent loss, but carelessness does. That's why you call it highest security because it gives you assurance that no one can take those BTC to you. Though it is not 100% safe but at least it is little to no chance that anyone can take those BTC to you. Unless you are so careless to not save any seed phrase or key that can help you retrieve your cryptos.

[joniboini]

I second the opinion that carelessness probably contributes more to this, or you could blame luck, too, if you wanted to push it further. At the end of the day, having multiple backups is necessary, and having a secure but easy-to-remember password is necessary.

I remember trying to make a complicated password with encryption and whatnot, but I failed to remember it properly because I didn't store the decryption method that well. I wouldn't blame my "complicated" password for that, though.

[pawanjain]

Let's try to get the logic and idea behind all this, if truly it was a self- custody, then probably be able to have access to his coin as long as he has the necessary private keys or seed phrase to import the wallet from another device.

Is Bitcoin were not stored on his device or wallet, instead on the blockchain, oh that's maybe required is the access to the private keys or seed freeze from another device, but while on his own device he may not be able to access his wallet because of the encoded keys and security is being made just to secure his wallet but not his Bitcoin, because bitcoins are not stored on the wallet or our device, instead on the blockchain.

The thing is that he had stored his coins in an IronKey Device and set a password to it and then forgot the password to that device.
The device is constructed in such a way that if someone enters an incorrect password 10 times then the data within the device is wiped out completely.
Thus making the bitcoins in it completely lost. So he has only 2 attempts left to access the private keys within that device so that he can get access to his bitcoins.

[KiaKia]

He didn't have access to the Bitcoin, this is different from losing the Bitcoin to scammers or hackers, I used the security he isn't prepared to watch over carefully, he shot himself in the foot, that's all I can say.

Too much of everything is bad and this includes security too, the way you choose to keep your private key can always end up biting your ass, if you keep your recovery seed in a safe that uses combination to unlock and you can't remember the key you are the problem.

In this case there is no win for scammers and also the owner himself,

[nakamura12]

Highest security can also results in losses if the person or the owner of the wallet even if it's self-custody is very careless. For example, even if the wallet is not on high security level but lost the password of the wallet file let's say it's about wallet.dat and won't even able to access it. I am sure you will find some people who no longer have access to their wallet file because they forget about the password. Having high security doesn't always mean that it's good just like having safe box but didn't even know the combination code if you compare it to bitcoin.

[Cryptomultiplier]

Highest security can also results in losses if the person or the owner of the wallet even if it's self-custody is very careless. For example, even if the wallet is not on high security level but lost the password of the wallet file let's say it's about wallet.dat and won't even able to access it. I am sure you will find some people who no longer have access to their wallet file because they forget about the password. Having high security doesn't always mean that it's good just like having safe box but didn't even know the combination code if you compare it to bitcoin.

Exactly. Higher level of security demands higher level of intelligence to maintain and keep what's in store.
Although multi-sig wallets help out a lot to recover passwords in a way, there's no saying that forgetting your security password, could be a bigger danger to an investors portfolio.
Iit is good to use high security tools and apps, but what's more important is how to not forget the password combination in the format you created it.

[robelneo]

I was reading a case about Stefan Thoman, who lost the password to his Iron key, which holds 7,002 btc in it and he had 10 chances and used 8 already. Now he is finding ways to recover the password.

It raises a question about self-custody that, can the highest security actually increase the chance of permanent loss?

It is if you are not good or you do not know or practice recovery, if you just memorize your password, thinking that you're the only one who can access then you will eventually lose that password, or like what Stefan did, write the password on a piece of paper, then lose it without a backup.

In his case, it's not about the highest security; it's about the highest carelessness. The highest security is still having a backup, because you know that if something goes wrong, you have a backup to restore everything. It's understandable that Stefan did not have safe practices in securing his assets.

[Ever-young]

He didn't have access to the Bitcoin, this is different from losing the Bitcoin to scammers or hackers, I used the security he isn't prepared to watch over carefully, he shot himself in the foot, that's all I can say.

Too much of everything is bad and this includes security too, the way you choose to keep your private key can always end up biting your ass, if you keep your recovery seed in a safe that uses combination to unlock and you can't remember the key you are the problem.

In this case there is no win for scammers and also the owner himself,

In anything that concerns Bitcoin, people are ought to be careful and caution in every decision they and this can be a easy thing for them if they only have the right mindset towards in investing in bitcoin but  despite that, people shouldn't dispute the fact that its still important to do more of research,  especially if they encounter with any unfamiliar thing, which will help them to detect when its a scam and when its not, because there are many ways that scammers do lure people into investing their in the wrong place and having the knowledge and understanding will help them avoid being victimized.

[Awaklara]

Highest security can also results in losses if the person or the owner of the wallet even if it's self-custody is very careless. For example, even if the wallet is not on high security level but lost the password of the wallet file let's say it's about wallet.dat and won't even able to access it. I am sure you will find some people who no longer have access to their wallet file because they forget about the password. Having high security doesn't always mean that it's good just like having safe box but didn't even know the combination code if you compare it to bitcoin.

The situation has indeed become complicated. We want to secure our Bitcoin with the best protection. But ironically, the highest level of security can lead us into a situation where we can't access the Bitcoin we own.
There are times when much simpler solutions can still be useful and give us hope. Not something more modern that only makes things harder for us.
This also applies to how we store recovery seeds or any files used to access our Bitcoin wallet. Keep them in a safe place, and although it's not without risk, it's better to choose the option with the lower risk.

[PrivacyG]

My take is to that question is no. Highest security doesn't increase the chance of permanent loss, but carelessness does. That's why you call it highest security because it gives you assurance that no one can take those BTC to you. Though it is not 100% safe but at least it is little to no chance that anyone can take those BTC to you. Unless you are so careless to not save any seed phrase or key that can help you retrieve your cryptos.

It does not have to be carelessness only.  High Security is much more complicated than what the average user does to keep their Bitcoin safe.  Storing Bitcoin on a Hardware Wallet is less complicated than storing it in a Hardware Wallet and burying the Seed at a particular coordinate.

The problem with High Security levels is that you may end up making things so complicated you do not even remember what you have actually done.  Because often the steps seem so clear and precise and years later when you want to repeat them, you realize they were simple then as you had them in front of your eyes but now they seem very vague and you do not remember.

Not only is the human mind to blame but it is the complication itself.  You could accidentally mess up passwords.  Even with a thing as simple as a Passphrase you could mess things up really bad if you accidentally miswrote 2 characters twice.  Things like these happened to me and they were not because I was careless, it was because my mind simply told me it was right when it was not.

Not to mention that higher Security could mean hiding a file on a computer and forgetting about it.  By the time you want to access it again, you may have already reinstalled the Operating System.  You may have backed up every single file, but you could always forget about that hidden 'dat' file you had.

High Security does mean higher risks of permanent loss.  And it is probably often not even related at all to not being careful enough.

[XZERO1]

~
It raises a question about self-custody that, can the highest security actually increase the chance of permanent loss?
~

Yes, higher security almost always comes with more risk of permanent loss, since one of the ways to increase your security and reduce risk of other people accessing your Private key/password is to remove ways to recover your own key/password.

Now can you find the perfect balance between being careful/caring about your funds security and also keeping accessing your funds relatively easy with minimum risk of loss? Yes.

That is specially true when you have only one way to access your wallet or funds, whether it's password or private key/seed phrase, people are usually afraid of writing down their passwords, but if you don't write it down and stick to just memorizing it you have to accept you are risking a lot, specially if we're talking about someone's life saving.

What if something happens to you or just your brain? after all at the very least your family members should have a chance to recover your funds and it's much better if it's written down somewhere that is fairly accessible to them.

[qwertyup23]

I am not saying security is bad, but saying it has tradeoffs and in bitcoin there is no password reset. Because this device is not a normal device, but maybe if Stefan had held those btc in a normal USB or a reliable storage device, maybe he would have those btc now.

There is a good saying that "the best will always be the enemy of the good." This can be explained by the fact that having a good level of security, there are great risks of losing everything in the pursuit of perfection. Sometimes you can overdo it and, due to inexperience or inattention, make a mistake, which will be much more difficult to correct if it was with the first result. The more complex the security system, the more difficult it is to set up, maintain, and monitor. Therefore, you should always understand that convenience and simplicity, with reasonable security measures, are always better than a paranoid degree of security that exceeds all reasonable limits.

This is actually a good way to say it in a simplified manner.

The question is- what is the extent tradeoff that we would sacrifice in order to enhance our security?

I agree- the more secured a platform is, the longer verification process it would entail in the future. With all the security measures installed, the slightest mistake could either make or break your investments in a single day.

Can we prevent this by remembering all of these verification and security process? YES; Is it possible that we MAY overlook one step out of the hundreds of steps that are required to unlock it? YES.

Highest security can also results in losses if the person or the owner of the wallet even if it's self-custody is very careless. For example, even if the wallet is not on high security level but lost the password of the wallet file let's say it's about wallet.dat and won't even able to access it. I am sure you will find some people who no longer have access to their wallet file because they forget about the password. Having high security doesn't always mean that it's good just like having safe box but didn't even know the combination code if you compare it to bitcoin.

Exactly. Higher level of security demands higher level of intelligence to maintain and keep what's in store.
Although multi-sig wallets help out a lot to recover passwords in a way, there's no saying that forgetting your security password, could be a bigger danger to an investors portfolio.
Iit is good to use high security tools and apps, but what's more important is how to not forget the password combination in the format you created it.

I find it very ironic because there was a time that I tried to secure one of my alternate accounts on Facebook by providing this complicated password with tons of 2FA from different accounts with different passwords. After a year, I tried accessing that account only to forget everything in the process.

[MusaMohamed]

The question is- what is the extent tradeoff that we would sacrifice in order to enhance our security?

I agree- the more secured a platform is, the longer verification process it would entail in the future. With all the security measures installed, the slightest mistake could either make or break your investments in a single day.

It is security by being self custodian and it's not a question like how to get better security with accounts on centralized platforms. Hopefully I did not misunderstand your point here but I think you seemed to move away from how to get better security with self-custodial to how to get it with custodial wallets on centralized platforms.

As with non custodial wallets, we can be self custodians and we must secure everything by ourselves. Having good or bad, better security for our wallets and bitcoins or not, it's only our responsibility and depends on our practice. It does not depend on any platform, as we don't store bitcoin on centralized and online platforms.

Can we prevent this by remembering all of these verification and security process? YES; Is it possible that we MAY overlook one step out of the hundreds of steps that are required to unlock it? YES.

Relying on our memory is very risky and bad practice, that is not recommended. We must do backups for wallet access, recovery later, and never rely on our memory for any step of wallet recovery.

[Muba20]

I was reading a case about Stefan Thoman, who lost the password to his Iron key, which holds 7,002 btc in it and he had 10 chances and used 8 already. Now he is finding ways to recover the password.

It raises a question about self-custody that, can the highest security actually increase the chance of permanent loss?

I am not saying security is bad, but saying it has tradeoffs and in bitcoin there is no password reset. Because this device is not a normal device, but maybe if Stefan had held those btc in a normal USB or a reliable storage device, maybe he would have those btc now.

For greater security, it is easy to understand that having a good storage is not enough to make it safe, as we see in Stefan Thomas concern. Storing assets in self-custody is safe, but if the backup keys are not kept after storing those assets, then the user himself is responsible for this. If you store assets depending on human memory or single recovery system, there is a high chance of losing these assets.

If someone keeps his entire life savings in such a wallet and if he does not have a backup key, then there is no guarantee that he will not lose his assets. The access he has can be lost for any reason. A copy of the seed phrase written on paper can be lost in water or fire, but if multiple copies of them are stored, then the risk of losing assets can be avoided. Iron Key device deleted its data forever if it is given on incorrectly after 10 times, so the user should have saved the security keys or password.

[coupable]

I second the opinion that carelessness probably contributes more to this, or you could blame luck, too, if you wanted to push it further. At the end of the day, having multiple backups is necessary, and having a secure but easy-to-remember password is necessary.

Let's admit that high security measures to save bitcoin is not that easy for everybody. Someone ignorant gets the chance to own a significant amount of btc is in high risk to lose access if he considers to use highest security. This can explain why many investors chose to store their savings in DEXs because they think by ignorance that it's safer to assign a third part to save the money rather than spending time learning which isn't accessible for everybody.

[r_victory]

I think the issue here isn't the efficiency or high level of security, but rather the carelessness of the wallet and cryptocurrency holder in not properly safeguarding their password and losing it. I don't use a hardware wallet; I use a regular software wallet, and I keep backups of my keys and seed phrases in various storage formats. It has worked well for me, and so far I've avoided the main problem: losing access to my cryptocurrencies. Having millions in Bitcoin is useless if I can't access it.

[retreat]

In this guy's case, I think it was a combination of ignorance and carelessness. He thought that if he had stored his Bitcoin data on a secure USB stick, it would be all right, but he was so careless as to simply write down the password on a piece of paper and lose it. If he hadn't been so careless and relied on such a fragile piece of paper for his password, he might have recovered his Bitcoins, but due to his ignorance, he lost them. Sometimes people focus too much on technical security while neglecting other, more important aspects.