Script Group lost_keys

Lost Keys

The majority of Bitcoin is secured through the use of private keys. Wallet applications generate public and private keypairs, which are used to generate an address.

Modern wallets use deterministic systems such as BIP39¹ to generate a root key which is used to derive every subsequent key. Thus, ensuring you have a reliable, safe backup of the root key, typically a 12 or 24 word mnemonic phrase, is sufficient to recover access to your funds.

Before such systems were developed, most wallets stored each keypair individually. This resulted in a number of additional ways to lose access to your coins - old backups wouldn’t be able to recover any keys for addresses generated after the backup was taken, for instance.

Over the years, wallet applications have also had a number of bugs, leading to unstable key production, bad encryption, and other cases which inadvertently resulted in funds being directed to addresses without known keys.

Even if the wallets work perfectly, users do still lose access to their keys by neglecting to make backups or other mistakes. burned.money’s lost_keys group tracks cases for which there is a reasonable degree of confidence that the keys are genuinely and truly lost.