He's Down to Last 2 Guesses to Access $240M in Bitcoin

'New York Times' looks at the problem of owners who have forgotten their passwords
By Jenn Gidman,  Newser Staff
Posted Jan 13, 2021 1:03 PM CST
Updated Jan 17, 2021 12:45 PM CST
He's Down to Last 2 Guesses to Access $240M in Bitcoin
In this Aug. 20, 2014, file photo, a sign promoting bitcoin buying and selling is seen at Central Texas Gun Works in Austin, Texas.   (AP Photo/Eric Gay, File)

It sucks when you can't remember your password to, say, your Amazon.com or Venmo account. It really sucks when the code that's right on the tip of your brain is keeping you from accessing millions of dollars' worth of bitcoin—and if you guess wrong too many times, your account will be locked forever. That's the plight of many a bitcoin owner, per the New York Times, which notes that of the 18.5 million pieces of cryptocurrency that are floating around, about one-fifth of them, worth $140 billion, are either lost or stagnating in locked-tight virtual wallets. The issue revolves around what's called an IronKey, a small hard drive that holds the digital keys to one's bitcoin wallet. You need a password to open the IronKey, and if you forget it, you only get 10 guesses before it all becomes permanently inaccessible. There's no company that keeps track of one's password (thanks to the software's algorithm, only the owner knows it), so there's no one to help you retrieve it.

Stefan Thomas, a San Francisco programmer who years ago lost the piece of paper he scribbled his IronKey password on, tells the Times he's used up eight of his 10 guesses. The bitcoin his password would allow him to access are currently worth more than $240 million. "I would just lay in bed and think about it," he says. "Then I would go to the computer ... and it wouldn't work, and I would be desperate again." As for how so many could forget passwords, remember that many people scooped up bitcoin more than 10 years ago, when it was worth barely anything. That's not the case now. Last month, the price passed its all-time-high of $20,000, and as of Wednesday, one bitcoin was worth nearly $35,000, per the BBC. Hackers are now trying to access locked bitcoin wallets, Business Insider notes, while some owners have their IronKeys hidden in case some day someone figures out how to unlock them. As for Thomas, don't feel too bad for him: He remembered the passwords for enough other bitcoin "to give him more riches than he knows what to do with," per the Times. (Read more bitcoin stories.)

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