Cryptocurrencies, an often forgotten feature

Cryptocurrencies can be stored at exchanges (Binance, CoinBase, eToro, etc.) or via wallets, specific apps on smartphones or other devices. Let’s leave out the first possibility, which presents a varied situation, and let’s focus on the second, on wallets.

The wallet owner is the only one who has access to the cryptocurrencies contained.

The owner is the sole manager and all security management is under his sole responsibility.

There is NO access credential recovery function (let’s call them credentials, even if the concept is more complex). Once they are lost, they are lost, with no possibility of recovery. There is no recovery function, no bank manager to contact, no wallet customer support to beg or a police station to report the loss. Lost is lost. Forever. And you have to be careful how they are stored, needless to say, offline, better on a piece of paper. Whoever has the credentials (be careful, the device is NOT needed, the credentials alone are enough!) has the wallet and the availability of the content!

On the internet there are pitiful stories of wandering souls who rummage in garbage dumps in search of hard drives with millions in Bitcoins thoughtlessly thrown away or who spend their days trying to remember the password of a hard drive that would make them billionaires, on the last attempt before self destruction.

But there is also the other side of the coin.

In fact, if cryptocurrencies are only available to the owner, so against his will:

• cryptocurrencies CANNOT be seized
• cryptocurrencies CANNOT be foreclosed
• cryptocurrencies CANNOT be frozen

by anything or anyone,

• NOT from the bank
• NOT by the government
• NOT from the Revenue Agency

Obviously, this applies to decentralized cryptocurrencies (almost all of them) but it does not apply to CBDCs (Central Bank Digital Currency) which some Central Bank have already issued and which others are studying. But this is the subject of another post from a few weeks ago.