Topic: Twitter dude lost access to his bitcoin using his weird(?) setup - page 2. (Read 450 times)

True, but the guy in question here runs a bitcoin podcast and has 11k Twitter followers. He has recently interviewed people like Peter Todd and Pavol Rusnak (co-founder of Trezor). And yet still he seems to have failed in basic bitcoin 101 of making and checking a back up, and has potentially lost his coins. How can we expect newbies to do any better when crypto "influencers" (God I hate that word) who have spent thousands of hours immersed in all things cryptocurrency don't understand the basics and are teaching bad practices. He does seem to be sponsored by a custodial wallet/centralized exchange and an anti-privacy wallet though, so make of that what you will.

He is also making questionable statements like this one:
Your hardware device doesn't encrypt your wallet - it is the wallet. All Electrum is doing is interacting with the keys on the hardware device. The Electrum file only contains addresses, labels, and so on. He doesn't seem to understand this. Also, your hardware wallet is only the single point of failure if you fail to make a basic back up, like every hardware wallet tells you to do before you use it.

And this one:
It sounds like he doesn't understand what a passphrase is or does. You can't just change it or remove it and expect to still access the same wallet.

I guess that we will have to insist more and more in telling people to verify the backups / restore options for their hardware wallets. People don't understand what they're doing and make mistakes. I expect to see problems more often, since most people just start using hardware wallets.

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My vote goes for bad passphrase. Maybe an enter or space at the end; maybe upper case problem? I hope he can recover his funds.

The wallet he is talking about is a BitBox2.

He also says he can unlock the hardware wallet, but cannot decrypt the Electrum file. When he unlocks the hardware wallet and generates a new Electrum wallet file, he is shown zero balance.

This means he either has the wrong passphrase or the wrong derivation path. And yes, he has failed at the most basic task of ensuring he has a working back up.

I might have exactly the same setup as the Twitter dude. My hardware wallet is a PiTrezor and for safety reasons using a mnemonic seed passphrase is recommended, because all wallet data and secrets are stored on the microSD card of the Raspi Zero.

I'm still evaluating the PiTrezor, therefore I used it only with Testnet Bitcoin wallets so far and I try to replicate a lot of test scenarios. The Electrum Testnet wallet I setup with my PiTrezor is locked by the PiTrezor, so a potential thief should not have access to the funds without the mnemonic seed passphrase and can't open the Electrum wallet either. He wouldn't be able to see my transaction history nor any other details of my wallet.

The error message indicates that the mnemonic seed passphrase has been entered wrongly. As every character counts, even trailing spaces, and UTF-8 is internally used the user needs to be careful.

I'm not going to look into the Twitter thread if and what exactly is screwed up. All I can say is if you use it properly it works as it should.

What I totally don't understand is: doesn't this Twitter dude have the mnemonic seed words and mnemonic seed passphrase as backup. That is all he needs to restore his wallet.

In a safe offline environment (e.g. boot TAILS in offline mode) he could recover his wallet with the mnemonic seed words and mnemonic passphrase and check if his public addresses are correct and the wallet recovery worked properly. Then he knows that his mnemonic data is properly documented and a wallet recovery is no issue.

I have no idea why this Twitter dude writes that there's no "seed phrase". It could be semantics, whatever he means by "seed phrase". I call the seed words as mnemonic seed words to avoid ambiguity. The optional seed passphrase I call mnemonic seed passphrase, not e.g. 25th word or so as it's not necessarily a single word.

This! In the onboarding process when you create a new wallet with your hardware device you usually get the very clear instructions to write down the mnemonic seed words. How and why do people mess this up? Usually you also need to confirm that you documented your mnemonic seed words properly.
OK, I'm no rookie with HD-wallets and I fairly know pretty well how they work and what is important. So I might lack the understanding why rookies screw things up.

It all sounds like his hardware wallet is used to unlock a normal electrum wallet, meaning that it somehow sends a password to Electrum and unlocks an encrypted file. A very bizarre setup, to put it mildly. Normally, a wallet file created by a hardware wallet won't contain any critical information - only metadata like xpub, addresses, transactions, labels, etc. No private keys or seed phrases. All private keys are always held on a hardware device completely offline. So, unencrypting a wallet file with no private keys gives nothing - you still need a working hardware device to sign transactions. I think that the crux of the matter is that he made a rookie mistake, he should have written down his recovery phrase somewhere, but he obviously didn't do it. If he had his recovery words on hand, he could insert them directly into a new Electrum wallet and get access to his funds.

I've experienced something almost similar to Trezor. When connected to Electrum, it asks for a passphrase. But I have never received a notification like the one above. I tried to match the password between Trezor and Electrum, but the wallet is stuck and won't open.



If he's using Trezor, try connecting Trezor to the Trezor Suite.
In the settings, select the Device tab and disable Passphrase.



After that, close Trezor Suite and try to reconnect Trezor to Electrum.

It seems like he's using a hardware wallet, but his backup wasn't a 12-24 word recovery phrase, but an encrypted file? I don't get it. I need someone that has far more braincells than me to please explain this LOL.

Tweet link: https://twitter.com/TheVladCostea/status/1553218817572196356