Bitcoin owner has only two guesses left to unlock $220m in cryptocurrency

Bitcoin

Credit: REUTERS/Dado Ruvic//File Photo

A Bitcoin owner has revealed he only has two guesses left to unlock more than $220m in cryptocurrency after eight failed attempts to access his fortune.

Stefan Thomas, a German-born computer programmer based in San Francisco, was given 7,002 Bitcoins more than ten years ago as a reward for recording a video explaining how the cryptocurrency works.

At the time, the Bitcoins were worth between $2 to $6 each.

With the price of Bitcoin rising rapidly during the coronavirus pandemic, those Bitcoins are now worth around $34,000 each, putting the value of the total fortune at more than $220 million.

Unfortunately for Mr Thomas, he kept the password to accessing the digital wallet holding the Bitcoin on a piece of paper — which he lost years ago.

The password is needed to unlock a small hard drive, known as an IronKey, which contains the private keys to a digital wallet that holds Mr Thomas’ Bitcoin fortune.

The IronKey allows users 10 guesses before it encrypts its contents forever.

Mr Thomas said he has already tried eight passwords he uses without success.

“I would just lay in bed and think about it,” Mr Thomas told the New York Times. “Then I would go to the computer with some new strategy, and it wouldn’t work, and I would be desperate again.”

Mr Thomas’ unlucky tale has thrown light on one of the pitfalls that come with dealing in cryptocurrencies, which, unlike traditional banks, do not have a function to retrieve lost or forgotten passwords.

According to the cryptocurrency data company Chainalysis, around 20 per cent of the existing 18.5 million Bitcoin appears to be stuck in lost or otherwise inaccessible digital wallets.

Many locked out owners have been forced to watch on, unable to cash in on their digital wealth, as the value of Bitcoin rapidly increased during the pandemic.  

Wallet Recovery Services, a business that helps find lost digital keys, said it has gotten 70 requests a day from people who want help recovering their riches, three times the number of a month ago.

After the coverage of Mr Thomas’ plight, some experts have suggested the computer programmer invest his money into ways to hack his IronKey and unlock the funds.

Alex Stamos, an internet security expert at Stanford Internet Observatory, said he believed he could crack the password within six months — in exchange for a 10 per cent cut of the digital fortune.

“Take it to professionals to buy 20 IronKeys and spend six months finding a side-channel or uncapping,” he said on Twitter. “I’ll make it happen for 10%. Call me.”

But for now Mr Thomas says he has put his IronKey out of sight and out of mind.  

“I got to a point where I said to myself, ‘Let it be in the past, just for your own mental health,’” he told the New York Times.