There aren’t many good ways to lose $220 million, but this New York Times article highlights a particularly egregious one — losing millions of dollars in bitcoin because you forgot the password to your digital wallet.
Stefan Thomas’ 7,002 bitcoin (worth roughly $220 million) are locked away in an IronKey hard drive, according to NYT’s Nathaniel Popper. The problem is he can’t remember the password, and he’s just two failed password attempts closer to losing them forever due to IronKey’s strict security protocols. There is the possibility of paying someone to crack the drive, but Thomas would have to have the time and money to make that happen.
It’s a darkly comedic scenario, and Popper’s story hits all of the cryptocurrency classics to help explain it. There’s mention of the volatile nature of bitcoin’s value and the currency’s mysterious creator, but what the article makes staggeringly clear is how common losing bitcoin actually is.
Two other people get singled out in Thomas’ story of woe, but it’s a surprisingly common tale. Of the 18.5 million bitcoin currently in existence, roughly 20 percent (around $140 billion) are lost in inaccessible wallets, Popper writes.
There have been other high-value wallets locked out in the past, with contents ranging from $30,000 to $300,000, but Thomas’ story is a reminder of how persistent this problem is among bitcoin users and how expensive it has become. The secure and decentralized nature of bitcoin is great — until it collides with simple human forgetfulness.