Would it be possible to not be able to send funds from a wallet?

Question

I was reading this blog post by Jameson Lopp on the best practices to back up a seed phrase https://blog.lopp.net/how-to-back-up-a-seed-phrase/

In the "Test your backup section", he wrote: "Initialize the new wallet using your seed phrase backup, make sure the funds appear in the wallet, and that you can spend them."

I've always done the steps he describes, except the "make sure you can spend them". To me, if I possess the private key and managed to restore the wallet, there's no world that exists where I somehow cannot send the funds. So I'd like to know, is there any scenario where you create a wallet, sends fund to one of the addresses, delete and restore the wallet properly using the seed but can't send the bitcoin you have?

Answer 1

is there any scenario where you create a wallet, sends fund to one of the addresses, delete and restore the wallet properly using the seed but can't send the bitcoin you have?

For example, If you ever import a private key after creating the wallet, a wallet restored from the seed-phrase will not have that private key.

I've no idea whether this is what Lopp had in mind. One obvious point is that the addresses and money associated with the imported private key wouldn't show up in the recreated wallet. So the issue ought to be apparent before you get to the point of checking money is spendable.

Having money visible but unspendable is something I associate with importing addresses. This usually shows up as amounts marked "unspendable" or "watch-only". Again, imported addresses don't appear in wallets recreated from a seed address so the issue should be clear before you get to the point of checking spendability.

Some people might have both a cold wallet and a hot wallet. The hot wallet might have watch-only addresses for the cold-wallet's contents. If you accidentally recreated the hot wallet instead of the cold wallet, and did so from a backup rather than from seed-phrase, you could end up with a wallet that couldn't spend all the visible money.

You'd have to ask Lopp to clarify exactly what was meant if you need to be certain.

Answer 2

Best practice for a long time now has been to only use BIP39 HD Account-Wallets

not the Type-0 address/privkey based singleton wallets, like brain wallets, paper wallets, physical coins etc, all now deprecated.

Also, no Wallet-Client software running on any device capable of connecting to the internet should ever see any Seed, xprv private keys

aka like a Watch-Only wallet, the node tree derived using the Extended Master PUBLIC xPub key only.

The Account-Wallet secrets Seed, Xprv, private keys only handled by the HWW in order to spend, signing transactions that are then broadcast by the at-risk net-connected client wallet.

The point is, make sure all of these moving parts are thoroughly tested with small value transactions, before using that account wallet to store any significant assets.