Your greatest strength is also your greatest weakness.
This is just as true for an idea or concept as it is for people. Consider the case of Bitcoin. Its greatest strength is that it’s decentralized. Thus, no one can control it. No one can corrupt it. It doesn’t exist in any one place. It’s stored in the blockchain, housed on multiple hard drives and storage spaces, in bits and pieces, and reassembled by a unique code. It’s nowhere and everywhere at once.
But since no one can control Bitcoin, no one can restore it for you either. And so, if you lose the password to your Bitcoin wallet, your money may be gone forever. It doesn’t matter if it’s a few thousand in Bitcoin or hundreds of millions — no one can reassemble that wealth of 1s and 0s without the password, or the unique key.
To that end, per the New York Times, “Of the existing 18.5 million Bitcoin, around 20 percent — currently worth around $140 billion — appear to be in lost or otherwise stranded wallets.” On average, in fact, 1,500 bitcoins are lost every day. Again, those losses are permanent. As Bitcoin.com support has warned potential buyers, “All Bitcoin transactions are irreversible, so there is no way to reverse a transaction that has already been sent.”
This, of course, has bred considerable desperation for those trying to recover their lost Bitcoin millions, their riches sitting torturously on the blockchain, just out of reach. Here are five such desperate tales (as well as one of the lucky few whose fortunes were saved)…
You Have Two Guesses at Winning $280 Million
Software developer Stefan Thomas lives in San Francisco, and he has two attempts left to unlock his $281 million worth of Bitcoin. You see, he thought it would be smart to store his Bitcoin wallet on a password-protected USB storage device called an IronKey, which gives you 10 guesses at the password. After the 10th erroneous guess, it’s permanently encrypted. The problem is, Thomas lost his hyper-secure USB password. Now, if he gets his last two guesses wrong, he loses access to his Bitcoin wallet forever.
“Since then, a lot of people have come up with all kinds of clever solutions, like metal wallets where you can put down your secret keys and things like that,” Thomas explained to the CBC. “But most of that didn’t exist” when Thomas secured his Bitcoin. “Back then, you had to kind of come up with your own solution. And apparently, I didn’t do a very good job of that.”
Lately, Thomas has been considering a radical new plan to unlock his Bitcoin: an electron microscope. “There is a way to take a scanning electron microscope and take apart the physical chip and literally go into the silicon chip and take away layer by layer, like a few atoms thick, and then read out the actual memory cells,” he told the CBC. “And then with that technique, you should be able to bypass that limit of 10 tries, and then you can have a supercomputer try, you know, billions of passwords per second.”
The bad news: That process could also destroy the chip.
Either way, it’s rather ironic that the Bitcoin Thomas lost was payment for a video he made explaining — wait for it — how Bitcoin works.
Dead Brother Takes a Fortune’s Secret to His Grave
A redditor posed his costly predicament as a question to r/Bitcoin, writing, “Finally found my long lost computer I’ve been searching for that had 533 bitcoins [current day value: $21.5 million] on it from when I bought them back in 2010. Little brother had it. He died, and I went through his stuff and found it. See anything missing?”
What was missing was the hard drive. His fellow redditors suggested scouring through all of his brother’s remaining possessions to locate it, which, unsurprisingly, the man had already done: “I’m still going through boxes. But he was a tinkerer. He loved pulling things out and seeing how they worked. And he was NOT organized about it. I fear it’s gone gone.”
Another Dead Man’s Bitcoin Secrets
Gerald Cotten was the 30-year-old co-founder of a Canadian cryptocurrency exchange. He was the only person at his company who had access to a fortune worth $190 million. It was stored in Bitcoin, other cryptocurrencies and regular old fiat currencies. Then, on January 14, 2019, Cotten died suddenly while on vacation in India. With his passing, 115,000 people lost access to their cryptocurrencies in the QuadrigaCX exchange.
More mysteriously, Cotten had redrafted his will just days before his death. That led to suspicions of foul play. Especially when the body was embalmed, flown back to Canada and buried in a closed-casket ceremony, all before Cotten’s death was announced publicly. What made things even more suspicious was that most of the cryptocurrency was missing. (One researcher located $100 million of the missing funds, but the rest remains lost.)
Currently, some claimants who have filed a lawsuit against QuadrigaCX to reclaim their losses are demanding that Cotten’s body be exhumed to prove that he didn’t, as many redditors believe, fake his death and run off with their cash.
One Man’s Treasure Is Another Country’s Trash
James Howells started mining Bitcoin in 2009. Four years later, he was over it and stopped. He broke up the computer he’d used to mine it and sold it for parts on eBay. But he was smart: He kept the hard drive. That way, he figured, “If Bitcoin did become valuable one day, I would still have the coins I mined.” A few months later, though, he forgot all about that plan and tossed the hard drive in the trash. Now it’s somewhere in a trash heap in South Wales.
As Howells watched the value of Bitcoin go stratospheric, however, he thought maybe he could retrieve his lost hard drive. Unfortunately, his hometown disagrees and has refused his pleas to search the local landfill for it. As a spokesperson for the landfill told Wired, “It is likely that the hardware would have suffered significant galvanic corrosion due to the presence of landfill leachates and gases.”
In layperson’s terms: Howells’ $300 million fortune is lost to the earth.
The $700 Million Hack-a-Thon
No one knows who owns the seventh-largest Bitcoin wallet, presently valued at $2.8 billion. It’s apparently abandoned. Or its password lost. For two years, though, hackers attempted to crack open the wallet and yank out that cash. (Its data was available for purchase on the dark web, which also led some to believe that it was all a fraud/hoax.)
But a month after Bitcoin.com published a story on the wallet, something weird happened. On November 4, 2020, all 69,370 bitcoins were withdrawn from the wallet. It turns out the Justice Department had seized them as part of a civil lawsuit; the forfeited Bitcoins had been stolen from the dark web marketplace, Silk Road.
The One Dude Who Actually Recovered His Lost Bitcoin
Last month, redditor BitcoinHolderThankU posted about how he earned 127 Bitcoin (roughly $5 million in current-day value) in 2011 and 2012, when the cryptocurrency was worth next to nothing. Back then, BitcoinHolderThankU was mostly interested in getting Bitcoin to purchase in-game currency in DarkOrbit.
He’d abandoned them, though, on an old Dell computer. Thankfully, it still worked, he wrote, allowing him to fire it up, find the private keys and unlock his Bitcoin bounty. (Along those lines, this tale of a man successfully hacking his own Bitcoin password is an incredible read, albeit with much, much lower stakes.)
So, you know, it can be done. But the odds are so high that it would give C-3PO a headache to calculate them. A far better bet would be to carve the Bitcoin password or key into metal and bury it somewhere (and then maybe tattooing a map to that spot on your body).
You could also just give the password to two people you trust. After all, if there aren’t two such people in your life, you’re not that rich anyway.