It wasn’t bad enough for former CTO of Ripple, Stefan Thomas, to forget the password required to unlock a Bitcoin wallet worth more than $240 million. It’s even worse when he realized that there’s little chance of getting it back.
The German-born computer programmer has just two password attempts left before a hard drive containing 7,002 bitcoins seize up his fortune and encrypt everything forever.
Stefan, who lives in San Francisco, earned his bitcoins as a reward for making a video explaining how Bitcoin works in 2011.
At this time, each bitcoin was worth around $5 per coin. But as Bitcoin rose past $41,000 last week (currently trading at $34,000), Thomas’ fortune worth more than a quarter-billion-dollars at today’s rate.
A painful memory. I hope others can learn from my mistakes. Test your backups regularly to make sure they are still working. An ounce of foresight could have prevented a decade of regret.
— Stefan Thomas (@justmoon) January 12, 2021
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According to Thomas, he wrote the password of his IronKey hard drive that holds the credential to his digital wallet on a piece of paper. However, he lost that paper many years ago and since then made eight failed attempt to guess the password to no avail. If he guesses wrong two more times, he’ll never see the money.
“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,” Thomas told the New York Times.
Ex-Facebook security head Alex Stamos, who is now professor at the Stanford Internet Observatory, has offered to help to recover the password, but for a 10% cut of Thomas’ fortune (roughly $24 million).
“Um, for $220m in locked-up bitcoin, you don’t make 10 password guesses but take it to professionals to buy 20 IronKeys and spend six months finding a side-channel or uncapping,” Stomas said on Twitter.
Losing passwords is the kind of nightmare that haunts cryptocurrency investors. In fact, there are an estimated 18.5 million Bitcoin, totaling nearly $140 billion, lost because the private keys went missing or the wallet owners died without passing the codes to someone else.
A British man, named James Howells mined more than 7,500 coins over one week’s time in 2009. He accidentally threw away the hard disk that contained the bitcoin private keys. This silly mistake cost him around $255 million worth of bitcoin at today’s prices.