Securing your wallet. A lesson learned

camb (55)in #iota • 7 years ago

This week I learned one way you can have your coins stolen.

In this case I was using the Iota wallet which requires you to create your own seed / password and doesn't have a seed generator built in like we are used to from other wallets that have been around a while longer.

The mistake I made was taking a shortcut and using an online seed generator that popped up on Google instead of taking the extra 5 minutes to read how to generate my own seed.

After using the wallet for about 1 month and filling it with my humble stash of 159 Mi I woke up the other day to realize that my all my coins had been sent to some unknown address in 1 transaction over night.

What a slap in the face. It really wasn't a huge sum of coin, but any loss is always frustrating. I was lucky I haven't traded in my other coins for Iota yet like I was planning on. It looks like now I'm going to have to though. Iota has too much potential to miss out on.

After moaning and groaning and looking for an explanation in some chatrooms, the universal answer was: "Did you create your seed online?"

Most likely the creator of the site where I generated the seed finally decided enough people had used his generator to create wallets and then used all those seeds to cash out and drain those wallets when Iota was at a highpoint.

Less likely, it could also be that the site of the seed generator was hacked and the seeds were stolen. However the seeds should have never been stored either way.

I wish I remembered what site I used, but I don't. It doesn't really matter.

My advice to you is don't use any sites to generate your seeds or passwords.

Iota is a relatively new currency that has no transaction fees and doesn't rely on miners since every transaction requires a user to verify transactions by another user. Instead of a blockchain it uses what is called a tangle. In the tangle every node distributes part of the database instead of requiring nodes to download the entire database (blockchain). Even with this recent setback I still have a lot of faith in Iota. It's a completely new approach unlike a lot of other currencies that are just clones of Bitcoin with minor tweeks.