Benzinga | Jan 7, 2021 07:01AM EST

Bitcoin Investor Lost $100K In Botched Up Wallet Migration: How You Can Avoid Similar Fate

A Reddit user has posted a warning to tech-savvy Bitcoin (BTC) holders not to be overconfident in the way they manage their cryptocurrency after losing nearly $100,000.

What Happened: The user, who goes by the name Onnar on Reddit, described in detail how he lost 2.6 BTC -- worth nearly $96,330 at press time -- while trying to migrate data from his old computer to a new one he got himself for Christmas.

While the user was transferring his private keys into the brand new computer from a USB backup, he was required to enter a password.

The strong password, which was auto-generated by a password manager program, was nowhere to be found though.

"After testing the password manager thoroughly during my search for an answer, I realized it has a serious weakness: you can create a password, then copy it, switch to another window and paste it. BUT IT'S NOT AUTO-SAVED."

In essence, Onnar basically clicked on the "Don't save" prompt inadvertently while exiting his password manager.

Why It Matters: The user acknowledged that using a physical wallet such as a Ledger is "more convenient" but pointed to the death threats the users of that brand of the wallet have been receiving since it was hacked, according to Coingeek.

Benzinga's Take: Always check if you are actually able to decrypt files before you erase your existing wallet, something that Onnar accepted was 100% his fault.

For non-tech savvy cryptocurrency holders, it is still best to use a hardware wallet, and here are the best ones you can pick in 2021.