‘I Forgot My PIN’: How One Man Lost $30,000 in Bitcoin

Mark Frauenfelder (@frauenfelder) is no average Bitcoin user, nor is he inexperienced with technology in general. Mark is the former editor of Wired magazine and founding editor in chief for MAKE magazine. I encourage you to read his compelling account of how he purchased over 7 BTC (now worth over $45K), stored them in his wallet, and then made a couple very common user mistakes!

Athena wallet login screen.png

Your username and password are the only things needed to access your Athena wallet now or in the future.

Better write them down because "password recovery" only works if you enable it, first, in Settings.

Mark's ordeal is a great illustration of three mistakes Bitcoin users so often make:

  1. MISTAKE: You create a password or PIN for your wallet and expect to remember it.

    Why doesn't this work? Most people can only remember codes they use over and over. Creating a new wallet is an absolutely critical time, in this sense, because you need to login successfully many times over several days and weeks before you can reliably remember a new code. To avoid this hassle, people often reuse PINs and passwords they are already using elsewhere. This is quite bad for security but good for avoiding the more immediate danger of forgetting the login.

    Nevertheless, Bitcoin users need to keep in mind that no one can help you if you forget the PIN or password to your wallet! People often forget codes they had to modify to fit the requirements of a particular app. The Athena Bitcoin wallet app, for example, requires a certain minimum number of characters for its passwords, so users will often be forced to change the password "they always use" to fit the requirements. This can easily result in the user forgetting those modifications later on.

    Solution: Don't count on always remembering your password or PIN!
     
  2. MISTAKE: You fail to make a backup of your wallet!

    Why doesn't this work? Because you're storing real money that can never be recovered if you forget your PIN or password! The #1 reason people lose their Bitcoin or other digital money is because they forget or misremember their login details or because something happens to their physical device (they damage or lose their phones). Why take the risk of either of these affecting you when you can just make a backup?

    Solution: If you have an Athena or Airbitz/Edge wallet, write down your username and password on a piece of paper! TEST that password by typing it into the "Remember your Password?" box when you first log in.

    Solution for other wallets: If you have any other type of wallet, write down the 12 or more word seed or recovery phrase given to you when you first setup the wallet and in the exact order given to you. You can also usually find it in that wallet's Settings menu.

    Can't remember your password or can't find your 12+ word seed? Carefully create a new wallet using a different app or device where you can write down the new backup information. Once you've successfully backed up the new, empty wallet, you should transfer all your bitcoin out of the old wallet and into the new one. Do a test transaction, first, before moving the bulk of your funds.
     
  3. MISTAKE: You fail to store your backup in a safe place!

    Why doesn't this work? This was the problem with Mark's case in the story above. He both misremembered his PIN (Mistake #1) and lost his only backup (Mistake #3). Only by very good fortune and a lot of work was he able to recover his bitcoin. For almost everyone else this scenario would result in a permanent loss of funds.

    Solution: Write down your backup on standard paper using a ball-point pen, preferably, and store it in a fire-and-water-resistant safe. Consider making a second backup as well. If you don't have a safe (or even if you do), make more than one copy of your backup and store them in at least two good locations far removed from each other in case one is lost.

    What about digital backups? Although digital backups, especially password managers with a really good master password, are better than not making a backup at all, we would advise against it. Good digital security is much harder to obtain than good physical security.

    Please remember that your backup is all anyone needs to steal all your bitcoin both now and in the future (from that particular wallet), so don't share your backup with anyone you don't absolutely trust and don't put it in a place that can be easily discovered.

Have questions about securing your bitcoin or other crypto assets? Feel free to contact us for additional assistance!