Ali Hasan
If you thought that bitcoin has lost all its value and an investor lost Rs 1,800 crores because of it, then really sorry for the click-bait-ish headline. But you can’t blame me as gaining your attention is very difficult these days.
Anyways back to the news, a man named Stefan Thomas who’s a German programmer based in San Francisco is about to lose his 7,002 bitcoins which was given to him in 2011. The reason is very funny and sad at the same time because he forgot his password.
The coins are worth about $245 million or almost Rs 1800 crores. Thomas stored all of his Bitcoin keys in a tiny, encrypted hard drive called IronKey which is the digital equivalent of the medieval cryptex. “However, there is a catch to storing things in IronKey. Anyone in possession of the drive will get only 10 attempts to unlock it by entering the right password, failing which the drive will encrypt itself forever, no second chances ever.
Despite Thomas’ Bitcoin wealth, the catch is that he forgot his password and he has already made 8 unsuccessful attempts to unlock the encryption device. 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.
The volatile nature of Bitcoin has also come to light through Thomas’ incident. “Unlike equities or any commodity for that matter, Bitcoin is not attached to any material of physical value, as a result of which the transactions that fluctuates its valuation cannot be controlled by any regulatory body. It is also theoretically possible for dark web bodies with possession of significant amounts of Bitcoin to manipulate its value without leaving behind any traces to track, or any law to hold them accountable for.
The Times report claims that as much as 20% of all Bitcoin, amounting for as much as $130 billion or Rs 9.5 lakh crores in ‘real’ money, is stuck in such crypto wallets with forgotten passwords that may never, ever be found or unlocked again. The amount of money stuck in this form is more than the GDP of many small nations around the world. Of this, Thomas’ ordeal represents 0.2% of the total amount estimated to be stuck behind a forgotten password.
At this moment, we can’t do anything but hope that he makes a successful attempt in securing his password and his $245 million or Rs 1,800 crores. If somehow he manages to recover the password, it would be like a climax of a movie where the hero diffuses a bomb where there’s only 2 seconds left. Let’s see what happens.
