San Francisco Programmer Forgot the Password for his $240M Bitcoin Wallet
San Francisco programmer Stefan Thomas has forgotten the password for a secure external hard drive that stores the keys to an electronic wallet with seven thousand Bitcoins, which at the current exchange rate is about $240 million. He only has two out of ten attempts to remember it left - after that the money will be lost forever. Keep reading this piece by the Passwarden team to learn more!
How Stefan Thomas Got and Lost his Bitcoins
Mr. Thomas became interested in Bitcoin in the early 2010s: he explains that cryptocurrency attracted him because it is not controlled by states and large companies. In early 2011, he published an animated video What is Bitcoin? in which he briefly explained the concept of cryptocurrency. One of the Bitcoin fans who saw the video decided to thank Mr. Thomas for popularizing the topic and gave him 7,002 Bitcoins.
Shortly before that, the Bitcoin rate crossed the one dollar mark for the first time. Mr. Thomas put the keys to the wallet on a secure IronKey disk and wrote down the password for it on a piece of paper. Later he lost this sheet.
The protected disk allows only 10 login attempts: after that, it overwrites the data, deleting the information forever. To date, Mr. Thomas has already entered eight passwords - all of them turned out to be wrong.
“I would just lay in bed and think about it. Then I would go to the computer with some new strategy, and it wouldn’t work, and I would be desperate again”, Stefan Thomas said.
Surprisingly Many Bitcoins are Lost
Losing Bitcoin wallet passwords is not uncommon. According to Chainalysis statistical research of cryptocurrencies, about 20% of all existing Bitcoins are lost to their owners. At the current exchange rate, this amounts to about $140 billion.
Bitcoin has risen in price six times in less than a year. Back in March 2020, it cost about $5,000, in the summer - more than $11,000, in December for the first time in history its cost exceeded $20,000, and by January 8 - $40,000. At the time of this publication, Bitcoin dropped a bit and was worth about $36,000.
Bitcoin Recovery
Due to the sharp rise in the value of the cryptocurrency, the number of people trying to access their lost Bitcoin wallets has increased significantly. Wallet Recovery Services, which helps recover lost keys, claims that the number of requests has tripled in the past month.
Bitcoin wallet owners who are locked out of their fortunes speak of endless days and nights of desperate frustration as they bang their heads against their lost passwords. Many have owned Bitcoin since the cryptocurrency’s early days a decade ago, back when no one could imagine how much these tokens will be worth eventually.
As for Mr. Thomas, he has put the disk in a safe place for now - in case cryptographers come up with new ways to crack complex passwords in the future. “I got to a point where I said to myself, ‘Let it be in the past, just for your own mental health,'” he added.
How to Avoid Losing Bitcoin Wallet
As you can see, your Bitcoin Wallet password is an important bottleneck - losing it can lead to losing all your Bitcoins. That’s why you want a reliable and convenient place to store your Bitcoin password. But at the same time, such storage should be secure and well-protected. You don’t want your keys falling into the wrong hands.
The best way to safely store your Bitcoin password is with a password manager like Passwarden. It will:
- Remember your passwords for you so that your Bitcoins never get lost
- Secure your passwords with data encryption
- Add additional protection with Master Password, two-factor authentication, Duress mode, etc
- Streamline your experience with password autofill and generator, multi-platform support, cross-device sync, etc
Download Passwarden now and store your Bitcoin wallet password in the most secure way! Also, you can get Passwarden as part of the MonoDefense security bundle. This is the most cost-efficient way to get a bunch of cybersecurity solutions for all occasions.