Man Forgets Password to $250+ Million in Bitcoin

Bitcoin has recently surged to record highs, reaching values of over $40,000 USD per coin earlier in January. Unfortunately for Stefan Thomas, a programmer based in San Francisco, these price jumps have caused nothing but suffering. Thomas owns an IronKey hard drive with 7,002 bitcoin, or ~$280,000,000 at a price of $40,000 per bitcoin. IronKey allows owners 10 chances to enter the correct password before permanently locking down and encrypting the contents. For Thomas, this would mean losing all 7,002 bitcoin, which may be exactly what happens.

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Thomas forgot his password and has used 8 of his 10 attempts to unlock his IronKey, leaving only two attempts to recover his fortune. He reported many sleepless nights trying to come up with a solution to find the correct password with little success. Thomas spent weeks feeling “completely destroyed” after realizing he would likely never see the coins again.

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As of now, Thomas doesn’t have many options. He is considering a method that requires the use of a scanning electron microscope to go into the chip and “delete” security measures. This would allow the 10-try limit to be bypassed, giving a supercomputer a chance to brute-force guess the password with billions of attempts. There are a few challenges that come with this strategy, the least of which is the cost. This process would be very expensive, as only a few people in the world can attempt to crack the drive. Even in a perfect scenario, success isn’t guaranteed. The chip has a high potential of being destroyed and losing the coins forever.

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Now that the price of Bitcoin is so high, the potential costs of recovery may be worth it. Thomas is in talks with people around the world, evaluating his options and determining whether he should even attempt a recovery. For now, Thomas has made peace with the fact that he will likely never see the money contained in the drive.

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The New York Times reports than an estimated $140 billion worth of bitcoin, ~20% of the 18.5 million in circulation, will come to a similar fate – lost or stranded forever. Regardless, the cryptocurrency has certainly come a long way from it’s first transaction of 10,000 bitcoin for a pizza over 10 years ago. It’s wild to think somebody spent, at todays value, over $300 million on a pizza!
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Adam Ewing has worked as an Engineer for aerospace and steel manufacturers as well as a Consultant for an R&D tax credit firm. Adam has a B.S. and an M.B.A. from the University of Alabama. His interests include traveling, cars, cooking, and triathlons. You can also find Adam on LinkedIn.

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