How to Recover Your Wallet if Your Private Keys Are Lost

Centralized institutions mean you can recover usernames and passwords in a jiffy - answering a few security questions or showing your ID to regain access.

Ownership of cryptocurrency is determined by who holds the private keys to these assets.

Most of the time, nothing can be done when private keys are lost.

Although it might be a little bit too late for those who have already lost a fortune, new technology designed to help people recover their private keys is starting to emerge.

Saving private keysSome blockchain platforms believe "Zero-knowledge proofs" - a relatively new concept in the cryptographic world which emerged in the 1980s - could transform attitudes to private keys, enabling them to be recovered without compromising security.

Your colorblind companion would put the balls behind their back - and would reveal one of them.

SovereignWallet uses zero-knowledge encryption to enable its users to recover their private keys by downloading the app on another smartphone should the device they normally use end up lost or broken.

As an alternative, they also have the option to retrieve private keys by relaying the mnemonic words which are generated at the time these codes are created.

Protecting assetsOf course, the concern for cryptocurrency holders is that any mechanism which enables them to recover their private keys - however desirable - could put their funds at risk of being stolen by bad actors.

Returning to the example of the colorblind friend, imagine the red and the green ball represent passwords, and you're the only person in the world who can see their color.