FEB 8, 2024
Wrong Derivation Path — A Proven Way To Lose Your Crypto
You may lose your cryptocurrency if you don't know your wallet derivation path. Will you take the risk?
If you haven't taken note of your Cryptocurrency Wallet Derivation Path, you may be unable to recover your Coins.
You must learn what a Wallet Derivation Path is, where to find it, and take note of it along your wallet seed phrase.
Taking note of a wallet seed phrase is NOT sufficient.
Will Your Heirs Be Able To Restore Your Wallet?
Let's hope for the best but prepare for the worst.
Here there is a short fictional educative story:
Mr.ChadCryptoWhale5000 is a Solana maximalist who accumulated thousands of SOL coins in a Solana wallet. Unfortunately, Mr.ChadCryptoWhale5000 passes away without leaving behind any inheritance plan.
His direct heirs take possession of the apartment where he lived and his belongings. Then, they sort out the belongings they want to keep from those they will dispose of.
Mr. ChadCryptoWhale5000's laptop goes to one of the family's juniors, who formats it, re-installs Windows, and uses it for school. Goodbye, Solana wallet.
While cleaning Mr. ChadCryptoWhale5000's desk, his brother finds a piece of paper with 12 words written on it.
Mr. ChadCryptoWhale5000's brother has heard a little about cryptocurrencies, so he thinks that maybe those 12 words are part of a seed phrase and decides to find out how to restore the seed phrase to a cryptocurrency wallet.
The sad ending
The brother has very limited knowledge about cryptocurrencies and only knows about Bitcoin and Ethereum. After some research, he installs an Ethereum wallet and a multi-coin wallet on his computer.
Then he restores the seed phrase to both wallets, but in both cases, THE BALANCE DISPLAYED IS ZERO.
At this point, the brother decides not to waste more time, uninstall the wallets from his computer, and throw the paper into the bin.
The 'happy' ending
Mr.ChadCryptoWhale5000 has copied not only the seed phrase but also the Solana derivation path: m/44'/501'/0'/0'
Mr. ChadCryptoWhale5000's brother does not know what m/44'/501'/0'/0' stands for, but after a short internet search, we find that most probably this number belongs to a Phanton wallet and proceeds to install the wallet to his browser and restore the seed phrase.
The wallet's balance is displayed, and, to his surprise, Mr. ChadCryptoWhale5000's brother finds out that he may be able to retire already.
The ideal ending
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