A German-born programmer in San Francisco has already used eight of the 10 password attempts he made to unlock the hard drive containing the private keys of his Bitcoin wallet, which contains 7,002 Bitcoin (BTC). To date, these holdings would be worth $ 268 million – that is, if they were accessible.
As described in a New York Times profile on January 12, Stefan Thomas uses a hard drive called IronKey, but lost the paper on which he wrote down the device password “years ago”. If Thomas doesn’t remember, ten unsuccessful assumptions will cause the unit to encrypt its contents forever. He has so far tried eight assumptions with no luck.
“I would just lie in bed and think about it. So, I would go to the computer with some new strategy, and it wouldn’t work, and I would be desperate again. “
It is believed that almost 20% of all existing Bitcoins – 18.5 million BTC – have been lost forever, in so-called “stranded” wallets, according to data from Chainalysis. Thomas is not alone in his overt despair: a Los Angeles businessman, Brad Yasar, told the Times that over the years “I would say I spent hundreds of hours” trying to get back to inaccessible wallets.
Yasar kept his hard drives “in vacuum sealed bags” so that he is no longer “reminded every day that what I have now is a fraction of what I could have and lost”.
Neither story is unusual: Wallet Recovery Services, a company that specializes in recovering lost digital keys, reportedly receives 70 requests a day from customers for help. This number is three times higher than before the market’s rise.
Thomas’s experience apparently took him away from the concept of a technology that places the burden on individual users to take their finances into their own hands – with all the freedom and risks that this entails. Having originally received BTC 7.0002 as a gift in exchange for producing a video to educate people about the currency, he is now skeptical about leaving users with this degree of control:
“This whole idea of being your own bank – let me put it this way: do you make your own shoes? The reason we have banks is that we don’t want to deal with all the things that banks do. “
In addition to his extraordinary losses, Thomas, however, has kept enough Bitcoin over the years to make a fortune – he is so rich he barely knows what to do with it, to paraphrase the report. Later, he also joined Ripple and acquired XRP, although the company’s recent legal difficulties may now cast a shadow on the project’s future prospects.
The report notes that there are similar risks when users entrust their keys to third parties – citing Mt. Gox and other industry crimes – but include the views of those who believe that the digital currency offsets are worthwhile at the end of the day.
A businessman in Barbados, despite having lost 800 BTC in the past, said that “the risk of being my own bank comes with the reward of being able to access my money freely and be a citizen of the world”. His vision, of a corner of the globe where financial inclusion remains a concern, provides insight into why many individuals can continue to think the same way.