Bitcoin has changed the way people invest today. For better or worse, it is there to stay. Many supporters of the cryptocurrency or this decentralised digital currency model spend long hours strategising for their Bitcoin investment. Some others oppose it for its apparent security risks and lack of stability.
Despite the criticism, people have built their wealth through the cryptocurrency. There are some unfortunate ones who can not access and control crores of rupees of wealth that they built through this model because of a lost or a forgotten password. Stefan Thomas is one of those people.
Thomas was an early investor in Bitcoin when its value was merely in single or at most in double digits. He owns 7,002 bitcoins till date, which are today valued at a massive USD 245 million (equivalent to Rs 1800 crores). Thomas had stored all his Bitcoin keys in an encryption device called IronKey to keep them safe.
IronKey allows only 10 attempts to unlock it through the right password. If the owner of the device fails to put in the right password in these attempts, the device encrypts itself forever, with no chance to access it ever again.
Despite Thomas’ Bitcoin wealth, the catch is that he forgot his password and he has already made eight unsuccessful attempts to unlock the encryption device.
First reported by the New York Times, the case of Stefan Thomas remarks on one of the major issues with cryptocurrency. It is based on a cryptographic key, which is a unique identifier of a cryptocurrency like Bitcoin and is only available to its owner. It does not have a central body with power or a master key to access it. In case someone forgets the password to their crypto wallet, no company or helpline can help them gain access to it again.
Another issue with something like Bitcoin is that it does not have a material value and its fluctuating transactions can not be controlled by a regulatory body. The dark web bodies can also manipulate the value without leaving any trace. As a result, Thomas would not have a guarantee that he would keep his wealth in the future if he finally gains access to the keys.
According to the New York Times report, 20 per cent of Bitcoin, amounting to about USD 130 billion (Rs 9.5 lakh crores) in real money is stuck because of forgotten passwords. This amount is more than the GDP of many countries.