The security features of Bitcoin mean that resetting passwords, getting regular emails about account access, etc., which are commonplace, will not be available to users. They have to remember a password for their wallet, losing which, they could lose access to their account and their holdings. A Bitcoin user is going through a similar dilemma.
$220 million in crypto at stake
A Bitcoin owner recently revealed that he could lose access to his crypto coins worth $220 million soon. He wrote the password for his digital wallet on a piece of paper, which he has now lost. He has already made 8 failed attempts to get his wallet back and now only has 2 guesses left.
Stefan Thomas received 7,002 Bitcoins over 10 years ago for making a video explaining how cryptocurrency works. The German-born computer programmer who is based in San Francisco got these coins when they were worth only $2 to $6 each. With the dramatic rise in the price of Bitcoins, each coin is now worth about $34,000 which gives Thomas’ holding a total valuation of over $220 million.
What happened to Thomas’s password?
Thomas kept the password written on a piece of paper which he lost several years ago. The password is essential to unlocking IronKey, a small hard drive that contains the private keys to his digital wallet. IronKey allows 10 attempts to log in to its drive before the contents are encrypted forever. The programmer said,
“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.”
Cryptocurrencies are not managed centrally. This means that the user has complete access to his codes and no third-party will be able to access his passwords or holdings. Unfortunately, this also means that a user doesn’t have a choice but to lose access to their holdings forever as password recovery is not possible. Crypto data company Chainalysis says that about 20% of the existing Bitcoin supply could be stuck in inaccessible wallets.
This is a syndicated post from https://www.cryptovibes.com/blog/2021/01/13/a-crypto-owner-could-lose-220-million-in-crypto-as-he-lost-his-password/