If you write down passwords, don't lose the paper
By Rob Thubron	 on January 14, 2021, 8:45 64 comments
Facepalm: Being left with a couple of password guesses before getting locked out of a system is something many have experienced, but not with $240 million on the line. That's the unenviable situation facing Stefan Thomas, who has lost the password to a hard drive containing 7,002 Bitcoin.
The New York Times reports that the German-born programmer, who lives in San Francisco, was given the haul of Bitcoin over a decade ago, back when they were worth just a few dollars each. Thomas stored them in a digital wallet on his IronKey hard drive and wrote the password down on a piece of paper, which he lost. With the price of Bitcoin surging recently, that drive now has around $240 million on it.
The IronKey allows for ten incorrect passwords before its contents are permanently encrypted. Thomas already has eight failed attempts.
Bitcoin's price over the last three months
"I would just lay in bed and think about it," Thomas told the New York Times. "Then I would go to the computer with some new strategy, and it wouldn't work, and I would be desperate again."
People have been offering Thomas help in accessing the drive—for a price. Former Facebook head of security Alex Stamos tweeted: "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." He added, "I'll make it happen for 10%. Call me," but later said this was a joke.
This isn't the first instance of someone losing millions of dollars worth of Bitcoin. British IT worker James Howells mined 7,500 BTC—now worth over $250 million—keeping the private keys on a hard drive. It was accidentally thrown away in 2013.
Cryptocurrency data firm Chainalysis estimates that around 20 percent of the existing 18.5 million Bitcoin, worth around $140 billion, is lost or stuck in inaccessible wallets.
The experience has soured Thomas' opinion of cryptocurrencies. "This whole idea of being your own bank – let me put it this way, do you make your own shoes? The reason we have banks is that we don't want to deal with all those things that banks do."
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