Educational Byte: What Happens If Your Crypto is Stolen?

You never showed your private keys, put strong passwords everywhere, didn’t believe in weird emails and surreal promises, and yet… it can happen. Your crypto might get stolen as much as your dollars, pesos, or euros might get stolen, too. It could be a physical attack, blackmail, malware, or even a clever scam. It doesn’t really matter. The important question is, what happens if your cryptocurrency is stolen? What can you do?

Unlike fiat or traditional money, crypto is immutable and pseudonymous, which means transactions aren’t reversible and people behind them aren’t easily identifiable. Now, as an advantage over fiat money, cryptocurrency could be easily tracked. Let’s see what you can expect.

Why Stolen Crypto is Hard to Recover

As we mentioned above, cryptocurrencies were built to be immutable: not prone to changes or rewriting. At least not as far as transactions and contracts are concerned. When someone transfers coins from their address to another one, the outcome is generally permanent, and nobody can reverse it, for any excuse —not even for theft. It may sound drastic, but there are good reasons for this design. The main ones are decentralization and freedom.

Distributed ledgers were built to not need trusted third parties that could become corrupt and/or apply censorship or blockages over time. There’s usually no central administrator overseeing networks like Bitcoin or Obyte who can cancel or undo transactions. Instead, these networks are formed by numerous independent nodes (computers) controlled by many different people across the globe.