A San Francisco based German programmer has lost his Bitcoin password worth $245 million, or almost Rs 1,800 crore. Stefan Thomas was given 7,002 Bitcoins back in 2011 and his account is about to lose all his Bitcoins as he has exhausted eight of his ten attempts to get the correct password, reported New York Times.
His Bitcoin keys were stored in a tiny, encrypted hard drive called IronKey. Anyone in possession of the drive will get 10 attempts to unlock it by entering the right password, failing which the drive will encrypt itself forever, no second chances ever.
This exposes one of the biggest downfalls of Bitcoin as it operates on the laws of cryptocurrency. The cryptographic key, serving as the identifier of a cryptocurrency is entirely unique, and only the one in possession will ever know it.
There are no organisations or a centralised body that has a master key, to access all or any of this data unless the key is specifically shared with them. Hence, if you forget the password to your crypto wallet, there is no company or helpline that can help reset it or give you back access to it the way a standard financial institution or bank would. It is also theoretically possible for dark web bodies with possession of significant amounts of Bitcoin to manipulate its value without leaving behind any traces to track, or any law to hold them accountable for.
As much as 20 per cent of all Bitcoin is stuck in such crypto wallets with forgotten passwords that may never, ever be found or unlocked again. This money which is stuck amounts for as much as $130 billion or Rs 9.5 lakh crore in ‘real’ money. The amount of money stuck in this form is more than the GDP of many nations around the world. Of this, Thomas’ ordeal represents 0.2 per cent of the total amount estimated to be stuck behind a forgotten password.
