A German-born programmer in San Francisco has now used up eight out of ten password attempts he has to unlock the hard drive containing his Bitcoin wallet’s private keys, which is 7,002 Bitcoin (BTC). At the time of writing, those holdings would be worth $ 268 million – if only accessible.
Like a New York Times profile on January 12, Stefan Thomas uses a hard drive called IronKey, but he has lost the paper on which he wrote down the password for the device “years ago”. If Thomas doesn’t remember, 10 unsuccessful guesses will cause the drive to encrypt its contents forever. He has tried eight times with no luck so far.
‘I just lay in bed thinking about it. Then I would go to the computer with a new strategy, and it wouldn’t work, and I would be desperate again. “
According to data from Chainalysis, almost 20% of all existing Bitcoin – 18.5 million BTC – would have been lost forever in so-called “stranded” wallets. Thomas isn’t alone in his self-proclaimed desperation: a Los Angeles entrepreneur named Brad Yasar told the Times that over the years, “I’d say I’ve spent hundreds of hours” coming back in inaccessible purses.
Yasar has stored his hard drives “in vacuum bags” so he is no longer “being reminded every day that what I have now is a fraction of what I could have 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 seeking help. That number is three times higher than before the bull market.
Thomas’s experience has apparently turned him away from the concept of a technology that places the responsibility on individual users to take control of their finances – with all the freedom and risk that this entails. After originally gifting the 7,0002 BTC in exchange for making a video to educate people about the currency, he is now skeptical that users maintain that level 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. “
Aside from his extraordinary losses, Thomas still held enough Bitcoin over the years to make a fortune – he’s reportedly so wealthy that he barely knows what to do with them, to paraphrase the report. He later also joined Ripple and acquired XRP the company’s recent legal troubles can now cast a shadow over the future prospects of the project.
The report notes that similar risks exist when users entrust their keys to third parties – quote Mt. Gox and other crimes from the sector – but does include input from those who believe that the trade-offs of digital currencies are ultimately worth it.
A Barbadian entrepreneur, despite losing 800 BTC in the past, claimed that “the risk of being my own bank comes with the reward of having free access to my money and being a citizen of the world.” His opinion, from a corner of the world true financial inclusion remains a concern, provides insight into why many people continue to think the same.