If a cryptocurrency user forgets his password, what happens to his wallet?

[Charles-Tim]

People can forget anything, people forget their bank passwords, people forget to take their important documents with them, people forget their wallet passwords, but it is not unusual. But there is definitely something to be careful about, if you forget the password of the bank, maybe you can go to the bank later after some trouble to get that password back, but if the password of a wallet is lost, then if it is not saved later, then it is impossible to fix the password.

If it is a noncustodial wallet, the password is an encryption that is not beyond the device that you have the wallet. It is not even beyond the wallet. Which means if you uninstall the wallet and install it back and import the seed phrase or you make use of a new wallet and import the seed phrase, you will be able to set another password.

About bank password. I do nothing more than to click on forgot password to set another password through an email sent me through an email link.

[KingsDen]

People can forget anything, people forget their bank passwords, people forget to take their important documents with them, people forget their wallet passwords, but it is not unusual. But there is definitely something to be careful about, if you forget the password of the bank, maybe you can go to the bank later after some trouble to get that password back, but if the password of a wallet is lost, then if it is not saved later, then it is impossible to fix the password.

If it is a noncustodial wallet, the password is an encryption that is not beyond the device that you have the wallet. It is not even beyond the wallet. Which means if you uninstall the wallet and install it back and import the seed phrase or you make use of a new wallet and import the seed phrase, you will be able to set another password.

About bank password. I do nothing more than to click on forgot password to set another password through an email sent me through an email link.

Thank you Charles-Tim for the information above. The way OP presented the topic, it looks as if it is a way of obviously stating the disadvantages of non custodial wallets while promoting the custodial wallets. A simple check as Charles said will show that the encryption is on the wallet and no connection to the Blockchain. Using the seed phrase to import in another wallet will thwart the power of the password.

[Z-tight]

but if the password of a wallet is lost, then if it is not saved later, then it is impossible to fix the password. In case such mistakes do not happen, we can note down the password of the wallet and some personal information in a diary.

It is not a bad idea to back up the password that encypts your wallet file, but that is not the most important thing to do as the password only encrypts it locally. What you should securely back up is your seed phrase, so that even if you lose the password or even the device, you can always restore your wallet in another device anytime, using your seed phrase backup.

[JISAN]

To create and control a centralized wallet, it has email, so in this case, if you forget the password of the wallet, there is an opportunity to forget it through email, so there should not be any problem if you forget the password in this case.

But in case of non custodial wallet there is a private key or security word which cannot be memorized.  They should be kept in a good place.  If someone loses these then he will lose his wallet for life and there is no way to recover that wallet. That is only truth

[Z-tight]

To create and control a centralized wallet, it has email, so in this case, if you forget the password of the wallet, there is an opportunity to forget it through email, so there should not be any problem if you forget the password in this case

There are more serious risks in using a custodial wallet, not your keys, not your coins, and the service can confiscate your money at anytime. What about the risk of the service collapsing and going bankrupt, custodial services are also known for fractional reserve scam, so what you see in your account is not your funds but just numbers. My point is that you should not store your funds in a centralized service for whatever advantage you think there is.

[Aanuoluwatofunmi]

Depending on the kind of wallet or exchange platform the cryptocurrency user is using, there are different repercussions to forgetting the wallet password.

It is possible to make recovery as long as the user is the bearer to that specific wallet, if you're using a custodial wallet, all you could do is to go through the forget password section and follow the prompt response needed and they will verify your identity and send a recovery link to reset your password on your email address used, if its a non custodial wallet, you may need to import your wallet keys on other device because the password is only effective on the particular devise used while the coins are stored on the blockchain.

[Z-tight]

if its a non custodial wallet, you may need to import your wallet keys on other device because the password is only effective on the particular devise used while the coins are stored on the blockchain.

You are right, your password only encrypts your wallet file locally, so losing your password is of no significance when you have the seed phrase, it is to simply import it into another device and create a new password. However, people should ensure they set a strong password and back it up, it could protect them from attacks on their wallet locally.

[gunhell16]

There are other users who turn an exchange they trust into their wallet; like me, I can't deny that I also have assets hidden in some centralized exchanges, which I think will not be the same as what happened with FTX. Although there is still a risk, that can be said because, of course, they still hold my password and my cryptographic assets.

Now if we use other wallets like Trust wallet, Klevr wallet, Electrum wallet, and Bluewallet here, we must not forget the password, especially the seed phrases, because once we forget it, don't expect to recover the password assets that you have. But if you have a backup, there is still a chance to recover it.

[Aanuoluwatofunmi]

I don't know how easy it is for a user to to forget his password like that, despite that, they will still be looking around for the password recovery agencies or developers not knowing that they will only accumulate to their predicament by stealing more funds from them, in short, the best means to go safe is in keeping our password safe and having an alternative storage to where we are saving them.

[NikeFit_7777]

         -     I'm the one who's experienced it several times that I've forgotten the password on a centralized platform, and usually when this happens to me it's the usual thing that the exchange does is they will disable my withdrawal or restrict my account with them within 24 hrs before it resume again.

For others, they do the same thing. And as for metamask, you really need not to forget the seed because if you lose it, there is no chance of recovering that account wallet for sure.

Well, at least you got access to your funds. And the fact that they block withdrawals is often done for security reasons. And in the case where you need a seed phrase, it's much more complicated. Because it is not possible to restore access via e-mail/phone number, etc. 

P.S. Therefore, absolutely everyone should be careful and write down all information that is related to personal funds. There is not always technical support, and it is much easier to lose access.