What if I lose the Ballet wallet?
If you’re a proud owner of a Ballet wallet or are on the precipice of making that life altering decision of becoming one, you may be wondering: what happens if I lose my Ballet wallet? This is a valid question we get asked quite often from new users and especially those who are still unaccustomed to the notion of self-custody. Rather than stating the obvious consequence, we believe that this is an answer that may be best self-arrived at rather than told. We want the person asking the question to rethink it for themselves. But for the most part, the crux is always clear:
Bitcoin and crypto has given us decentralized money that can be legitimately held by ourselves, through many self-custody methods, but the costs of self-custody should also be clear. The Ballet wallet is a physical bearer instrument. According to Investopedia: “The holder of a bearer instrument is presumed to be the owner, and whoever is in possession of the physical bond is entitled to the coupon payments.”
The same can be said for our other personal belongings.
What happens if you lose your wallet along with all of its cash and memorabilia content?
What happens if you lose the watch off your wrist?
What happens if you lose that engagement ring?
These are also all legitimate questions but that doesn’t deter us from possessing or bearing these items out for day to day activities. Why? Because we either need them on a daily basis or we just want to have them on us for less obvious personal reasons.
At the end of the day, anything you personally attach importance and value to should be properly cared for, including its security.
To balance it with an extreme notion, if one is so paranoid about losing their worldly possessions then, in lieu of a normal home, one should find an appropriately sized hole, furnish it with state of the art anti intrusion deterrents and then never leave. In short, it is impossible to achieve a perfectly ideal circumstance in one arena without compromising in a different one. In the aforementioned example, one may have come close to achieving perfect physical security but at the cost of giving up quality of life in almost every other department.
Assuming you do not fall in the category of extreme paranoia, you should accept that there is a chance, no matter how small, of bad things happening. Lightning has struck the same person twice before. The chances of something bad happening to your crypto is infinitely higher. This is why we also don’t encourage users to keep all of their crypto in one wallet. Spread them out. Many in the industry are blind to the fact that wallet diversification is as important as portfolio diversification!
And if you want, you could go ahead and make a backup of the Ballet wallet. Wallets and private keys inherently do not have backups. They don’t explicitly require you to back it up or make a copy. It’s the wallet providers and general community that encourage users to make a backup if that one wallet holds a substantial amount of crypto. But in fact, making a backup is optional. You could or you don’t need to. With the Ballet wallet, although we don’t explicitly require you to make a backup, that DOES NOT mean you can’t make a backup.
But do be careful of backups in general. Essentially you are increasing the surface area of your crypto assets by creating a backup. We discussed this notion in an earlier blog here.
“What I want to talk about is backup. With online photos, with online music, you want to make backup copies that way, if a hard drive crashes, if you lose a computer, you have backups of your photos and music, right? That’s a good thing. However, with private keys, you don’t want to have too many backups because in theory, you don’t want to lose your coins. Every time you make a backup, you actually increase the loss, the chance of loss because all it takes is one backup to get into the wrong hands.”
— Bobby Lee | On a CryptoFactor 2 podcast
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An excerpt from our blog “The Unseen Dangers of a Backup: A Series of Bad Analogies”:
Of course, there is nothing wrong with creating an informed contingency plan against loss. A backup hedges against uncontrollable things like the hypothetical wild jaguar who bafflingly decided to turn your cold wallet into a snack. If that ever happens to you, no doubt it will come as a great relief for you to have not only escaped with your life but to have continued access to your crypto assets. However, it is important for one to not have any misguided notions on the function and limitations of a backup. Ultimately, a backup mitigates losses to accidents at the cost of increasing exposure to malign actors.
There is an old truism involving not placing all of one’s eggs in one basket. This is especially true when it comes to crypto asset storage. Would it be preferable to store 100% of one’s assets in a wallet and then create a contingency backup for it, thereby creating two copies of it? Or is it preferable to have two wallets each holding half of one’s assets? The latter option compartmentalizes your losses in the event that a malign actor does find access to one set of your private keys, while maintaining the same total surface area of risk. The former option would result in a complete loss of funds.
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You should also ask yourself this, are you going to put a substantial amount of crypto on the Ballet wallet? If yes, you should definitely reconsider carrying it around on a daily basis. Place it in a secure area that you know you can have access to is the more prudent strategy. But if you want to hold around a smaller amount of crypto with you on a daily basis to make purchases, then sure you could carry around your Ballet wallet. It is assumed you know the risk that not only your Ballet wallet could get lost, but so can anything you have on yourself.
The next time the question of “What if I lose it?” is posed to us or to an existing Ballet wallet user, flip it back at them and ask, “What if you lose one of your other personal items that has substantial value to it but with no backup?”. Surprisingly, most people don’t bother to ask themselves this because they know the benefits of having that item far outweighs the risk of losing it. And with anything of substantial value, it’s natural to consciously be aware of its safe-keeping, regardless of its current location being taken to.
Considering that eventually bitcoin and crypto will be the normal medium of exchange, it’s about time we get comfortable walking around with these digital assets like it’s second nature.
Ballet is a U.S. company that provides simple and secure cryptocurrency storage solutions for the global mainstream market. Ballet is the team behind the world’s first multi-currency, non-electronic, physical crypto wallet. The company was founded in 2019 by Bobby Lee and an international team of cryptocurrency industry veterans. Ballet is headquartered in Las Vegas, Nevada in the United States, and has an office in Shanghai, China.
For more on our products please check us out at: https://www.ballet.com/
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