Today, I had a great example of how important your passphrase is for your Bitcoin. A while back, I purchased a Cobo Vault for a hardware key for my Bitcoin. All seemed great. I loved the device. Well, a few months ago, it was announced that Cobo would no longer be producing the Cobo Vault. The entire design team left the company, and started a new one, Keystone. Okay, that kind of thing happens in business, right? Not so fast, skippy.
The folks at Keystone setup a discount for all Cobo Vault users, which was very nice of them to do that. They didn’t have to, but it was good business to do that. The people running Cobo had decided to not make things easy. They would not simply let you update your firmware to match Keystone, even though the devices are practically identical. They did offer a refund to people who had purchased Cobo much later than I did. Good for them. Not so good for users like myself. I did take advantage of the discount, and get a Keystone.
Theoretically, it should not have been a problem. Yea, right.
Turns out it was a problem.
Today, I decided to move sats from my BlueWallet that was connected to my Cobo Vault as a “watch only wallet.” “What is that?” you may ask. A “watch only wallet” is a special kind of Bitcoin wallet that you create in an app like BlueWallet (which is fantastic by the way). The “watch only wallet” is supposed to give you a bit more security. Your software wallet links to your hardware wallet. The software wallet keeps track of your funds, the hardware wallet protects your private keys. You can not send Bitcoin from your software wallet without your hardware wallet as a way to verify it. Yes, I know, it all gets complicated. That is one of the challenges with Bitcoin. It is not as easy as dealing with cash or a credit card, yet.
Anyway, I went to send my sats that were stored in the watch only wallet on BlueWallet. Everything appeared to be working great until I had to scan the special QR code in BlueWallet with my Cobo Vault. It kept giving me an error. Saying:
Read Error
Transaction not recognized. Your Keystone has not been successfully paired with the watch-only wallet.
What? I had used that same setup in the past to send sats to other wallets. I sent an email to the support team at Cobo. Of course I get an automated email back.
So, at this point, I had two options. Wait until I hear back from Cobo, or fix it myself. I chose the later.
BlueWallet is able to recover a wallet, even one that is “watch only,” IF you have your passphrase. In Bitcoin Baby Steps - vol 6, I talked about BlueWallet, and your passphrase. Your passphrase is your backup of your wallet. It is 12-24 words. THIS IS IMPORTANT! Those 24 words saved me!
On my computer I also have a fantastic software wallet called, Electrum. It was one of the wallets that I listed in Bitcoin Baby Steps - vol 4.
I’m not going to go into all of the details here. BlueWallet has an excellent support page that tells you how to recover your wallet to Electrum. You can find it here: Recover Another Wallet.
Important note: Electrum is not a beginner friendly wallet. It is great, and saved me here, but I’m not recommending it for the beginners.
So, here is my point. Protect your passphrase as if all your money depends on it! Because it does! Using my passphrase made it possible to recover an amount of funds that, although it would not have broken me, it certainly would have made me cry. Here is why you need to protect that passphrase. If a bad person had my passphrase, they would have been able to take all of the Bitcoin that was in that wallet. I keep my funds in multiple wallets so that if someone were to get ahold of a particular wallet passphrase, they would only get what was in that one wallet. Not all of my Bitcoin. It is more to keep track of, but makes me feel safer.
Be careful out there my friends. I truly believe Bitcoin is the future, and will greatly increase in value. However, right now, it can be risky. That is the part that only you can decide if it works for you.
If you have not read them, here are the other volumes of Bitcoin Baby Steps:
Thank you for reading Bitcoin Baby Steps!