Bitcoin Wallet Standards Ensure Funds Can Be Recovered

To many consumers, the concept of a Bitcoin wallet remains rather difficult to grasp. After all, the main goal of Bitcoin is to be in control of finances at any given time. But for mobile users, they have to rely on wallets developed by third party providers. What were to happen with one’s wallet if a company like Mycelium decided to pull the plug on their project? Absolutely nothing, as one can easily recover their keys by using the backup seed.

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Bitcoin Wallet Backup Seeds Can Be Imported

TheMerkle_Bitcoin Wallet Backup

One of the major misconceptions arises when the discussion on digital currency turns to the topic of Bitcoin wallets. There are quite a few different options to choose from, especially where the mobile sector is concerned. Most people will stick to the bigger names, such as Breadwallet, Mycelium, or AirBitz. But other companies and developers have come up with their own mobile solutions as well in recent years.

A lot of novice users see these mobile wallets as a third-party service, as they are effectively trusting the servers of specific companies to both send and receive transactions. But if those servers would go down, or the company was to pull the plug on the project, one’s Bitcoin wallet becomes useless.

Or that’s the conclusion most people would draw, albeit it is not a correct one. Every mobile Bitcoin wallet provider lets users create a backup seed during the initial setup process, which usually consists of a string of random wars. This is called a mnemonic key and is all but impossible to guess by hackers.

As one would come to expect, this mnemonic key needs to be entered whenever a user replaces the devices on which they want to use the Bitcoin wallet. For example, buying a new phone means the Bitcoin wallet will have to be installed on the new device while still giving access to the same Bitcoin address and balance.

What people sometimes fail to realize is how this backup seed can be imported into any Bitcoin wallet. Access to that specific address and balance on your PC – rather than on mobile – is not a problem in most cases, as companies use certain standards that are compatible with any Bitcoin wallet solution.

Granted, some companies may use a standard that deviates slightly from what is most commonly used, which could be a bit of an annoyance to overcome. Always do some research as to which standards a certain wallet provider uses and see if it is compatible with other solutions you have heard of.

It is important to keep in mind funds will never be lost if the end user ensures to make a proper backup of their Bitcoin wallet, and keep the mnemonic seed somewhere safe. Without those details, restoring access to an address and balance will not be possible.

Source: Reddit

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