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Forgetting a password has never been so expensive: 200 million in bitcoin

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Bitcoin has made headlines again in recent weeks. Despite the volatility of the cryptocurrency, there is no doubt that it has increased in value since it broke into the market. Now imagine having a large number of bitcoin in a digital wallet whose password you do not remember. That has happened to Stefan Thomas.

Stefan thomas, a German-born programmer living in San Francisco, received 7,002 bitcoin from a cryptocurrency fanatic in exchange for making a video in 2011.

These bitcoins are stored on a small hard drive, known as an IronKey, which requires digital keys to access it. Stefan wrote down these keys on a paper whose location is unknown. IronKey allows you up to 10 login attempts, before it is seized and your content is encrypted forever, and Stefan Thomas has already spent 8 of them to no avail.

To put the situation in context, at the beginning of the year, the price of the cryptocurrency rose as a result of the US-Iran crisis, overcoming the important resistance of $ 8,500, level where experts set a change in trend and denote "greater strength in the market."

Actually, the ‘crypto’ battle with $ 46,000, but it has reached all-time highs above $ 58,000. There are numerous experts who question the sustainability of the price above $ 50,000, while many others see the $ 100,000 figure as the target of the current bull run. This is the case of José María Rodríguez, technical analyst at ForexNews.online. "The strong falls of the bitcoin, a drop in the immense bullish ocean in the background," explains the expert.

Bitcoin has made many of its holders rich in a short time, including during the coronavirus pandemic, which has ravaged the global economy.

“I would lie on the bed and think about it. Then he went to the computer with some new strategy, and it didn't work, and he was desperate again, "said the victim in an interview with The New York Times.

20% OF BITCOIN ARE IN LOST WALLETS

The only consolation Thomas could have is that he is not alone in the world. According to the cryptocurrency data company Chainalysis, of the 18.5 million existing bitcoin, around a 20% of them are in lost wallets or stranded, which is several billion dollars lost. Evil of many …

Wallet Recovery Services, a company dedicated to recovering lost digital keys, stated that it had received 70 requests per day of people asking for help to regain their wealth.

Something like this also happened to Brad Yasar, a Los Angeles businessman, who owns thousands of bitcoin stored on computers whose passwords he lost years ago. "Over the years I would say that I have spent hundreds of hours trying to get back to these wallets," said the businessman.

The peculiarity of bitcoin is that does not have any company that provides or stores passwords, as it happens for example with PayPal. Satoshi Nakamoto, creator of the cryptocurrency, stated that the central idea behind it was to allow anyone in the world to open a digital bank account and save money in a way that no government could prevent or regulate it.

This is possible thanks to the bitcoin structure, which is governed by a network of computers that agreed to follow software that contains all the rules of the cryptocurrency. The software includes a complex algorithm that allows you to create an address, and an associated private key, that only the person who created the digital wallet knows.

This software also allows you to confirm the accuracy of the key to allow transactions, without seeing or knowing the key itself. In short, the system allows anyone to create a bitcoin wallet without having to register with a financial institution or go through any type of identity control.

This is why bitcoin also has attracted crimesince the money can be used without revealing the identity of the criminals. Likewise, inhabitants of countries with authoritarian governments such as China or Venezuela, have begun to use cryptocurrency, since their governments are known for robbing or closing traditional bank accounts.

Many entrepreneurs have seen a business opportunity in the fragile memory of many cryptocurrency holders. Thus, Diogo Monica, co-founder of Anchorage, states that "even sophisticated investors have been completely unable to do any kind of private key management." His start-up started in 2017, helping companies manage cryptocurrency security.

On the other hand, the fact that these cryptocurrencies are stored on computers is the possibility of losing them with a simple format. That happened to Gabriel Abed, a 34-year-old businessman from Barbados, who lost about 800 bitcoin when a friend of his decided to format a laptop that contained the private keys to a bitcoin wallet.

However, Abed decided to continue with his investment, as he claimed that in Barbados it is almost impossible to get a simple PayPal account. "The risk of being my own bank comes with the reward of being able to freely access my money and be a citizen of the world – that's worth it," he said.

In the case of Stefan Thomas and Gabriel Abed, the losses caused by misuse of the keys have been rewarded by the big profits that they are currently making of those bitcoin that they were able to keep.

Regarding Thomas' inaccessible bitcoins, he has stated that he has decided to put the IronKey hard drive in a safe place (whose location only he knows), waiting for cryptographers to come up with new ways to crack complex passwords. As he told The New York Times, "keeping her away helps you try not to think about her." "I reached a point where I said to myself: Leave it in the past, just for your own mental health," he said regretfully.

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