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Stefan thomas bitcoin story

SF man who can't remember Bitcoin password says he's 'made peace' with $220M loss

By Marco Cavicchioli - 13 Jan The story of the German-born American programmer Stefan Thomaswho is in danger of losing million dollars in Bitcoinis indeed exemplary.

In order to unlock it, he has to enter a password, and he only has 10 attempts to enter it, after which access to the disk would be permanently cut off.

The problem is that Thomas has lost that passwordand has already used up eight of the ten attempts. Theoretically, in order to regain possession of those bitcoin, it would be enough for Stefan Thomas to have the seed or private keys of that wallet, which he no longer has. In fact, with the seed or the private key, he could use another wallet to move those BTC.

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When storing such large sums of money, it is not at all clever to simply keep the access keys on a single sheet of paper. Moreover, it would be even less prudent to store only the password to access the device, knowing that you only have a very limited number of attempts, and not the private keys or the seed directly. In this regard, Diogo Monicaco-founder of Anchorage, a startup that helps companies securely manage their cryptocurrencies, said:.

In other words, this is not an isolated problem, but indeed a rather widespread issueespecially among those who are not in the habit of taking truly secure, durable and sustainable measures to store the private keys of their wallets. ClassMarco teaches web-technologies and is an online writer specializing in cryptocurrencies. He founded ilBitcoin. Eleonora Spagnolo - 17 Feb We use cookies to make sure you can have the best experience on our site.

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Marco Cavicchioli ClassMarco teaches web-technologies and is an online writer specializing in cryptocurrencies. Related posts More from author. The Cryptonomist Italia. More Stories. Microsoft will not invest in Bitcoin Eleonora Spagnolo - 17 Feb Speaking to The New York TimesStefan Thomas, a German programmer living in California, revealed that he was gifted the bitcoin, which has fluctuated in value over the years before recently surgingas a reward for making an animated video about bitcoin in Since then, Thomas told the outlet he has tried eight variations of his commonly used passwords in an attempt to gain access to his IronKey.

Bitcoin is also unable to help, as it does not store passwords, but rather grants individuals who buy bitcoin a private key to their digital wallet - which only they have access to. In addition to keeping the password to his cryptocurrency safe, Thomas told The Times he also did it to protect his mental health. Want to bookmark your favourite articles and stories to read or reference later? Start your Independent Premium subscription today.

Man who lost password to $220M worth of bitcoin says he’s ‘made peace’

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To improve your experience update it here. News Technology. Tweet Facebook Mail. The forgotten password which is keeping Mr Thomas awake at night would let him unlock a small hard drive, known as an IronKey. The IronKey contains the critical private keys to Mr Thomas' digital wallet, where the Bitcoin fortune is locked up.

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If Mr Thomas makes 10 failed IronKey password attempts, the hard drive will seize up and encrypt everything for eternity. His plight has drawn the attention of hard drive and password crackersoffering their services for a slice of the quarter-billion-dollar pie. Alex Stamos, an internet security expert at Stanford Internet Observatory, claimed he can crack the password within six months. His price? Call me. Perhaps the best-known case of anyone losing their Bitcoin fortune was James Howells, a Welsh IT worker, who in unintentionally threw Bitcoin in a landfill.

Mr Howells' Bitcoin would also be worth more than a quarter-billion-dollars on today's rate. He tossed his hard drive, where his Bitcoin private keys were stored, into a rubbish bin which was dumped at Newport, South Wales.

However, I kept the hard drive in a drawer at home knowing it contained my Bitcoin private keys, so that if Bitcoin did become valuable one day I would still have the coins I had mined," he told the Telegraph. Even with the drops over the weekend and Monday, Bitcoin is still up more than 10 per cent already in - and it has soared about per cent in the past 12 months.

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stefan thomas bitcoin story

Share Tweet Email. Personal Finance. By Liz Kreutz. Share: Share Tweet Email. Stefan Thomas went viral this week after a New York Times profile revealed to the world his unsettling dilemma: The password to unlock his Bitcoin fortune is locked in a hard drive that gives users 10 attempts before wiping clean. Thomas has just two more tries. RELATED: Coinbase customer loses username and couldn't retrieve it In an interview with ABC7 News on Wednesday, Thomas said it's now been nine years since he first realized he was locked out of his account, which means he's had ample time to process it.

Report a correction or typo. Related topics: personal finance san francisco lost money money technology bitcoin cryptocurrency password. Conservative media icon Rush Limbaugh dies at OPD chief urges Chinatown residents not to arm themselves. How does recalling a CA governor actually work?

Here's the process.Stefan Thomas says he has just two more tries to get the password right before he's locked out of his Bitcoin account forever. But those nine years have given Thomas enough time to process the potential loss. And while he says "time heals all wounds," the moments he first realized he couldn't access his cryptocurrency account were harrowing, to say the least. Thomas said he has used up of eight of his 10 tries to get the password right, having lost the paper he wrote it down on inand people around the world have tried to help him out.

Some people are suggesting nootropic memory-enhancing drugs. Eventually, Thomas reached "a really big milestone in [his] life where" he "realized how [he] was going to define [his] self-worth going forward. Thomas, a programmer who was born in Germany, told The New York Times in an interview published Tuesday that he was given the 7, Bitcoin by, as the Times describes it, "an early Bitcoin fanatic" after making a video titled "What Is Bitcoin? No doubt at least somewhat as a result of his experience, Thomas now believes there's a good reason that traditional financial institutions exist, as opposed to open-source money-exchange solutions like Bitcoin.

stefan thomas bitcoin story

FB Tweet ellipsis More. Get push notifications with news, features and more. You'll get the latest updates on this topic in your browser notifications. Image zoom. Bitcoin illustration. Bitcoin logo, price and graph. Close Share options. Close Close Login. All rights reserved. Close View image.We've all been there - brain fog makes us forget our password and after eight frantic attempts, we have just two left.

His plight, reported in the New York Timeshas gone viral. Mr Thomas, who was born in Germany but lives in San Francisco, was given 7, bitcoins as payment for making a video explaining how cryptocurrency works more than a decade ago. After 10 failed attempts, the password will encrypt itself, making the wallet impossible to access. He told the New York Times: "The whole idea of being your own bank - let me put it this way, do you make your own shoes?

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Call me. Mr Thomas would not be the first potential Bitcoin millionaire to be locked out of their fortune. The New York Times article also references an entrepreneur who lost about bitcoins when a colleague reformatted a laptop containing the private keys to his wallet. And ina Welsh man desperately searched a landfill site after throwing away a computer hard drive containing 7, bitcoins.

Bitcoin has surged in value in recent months. But the cryptocurrency is volatile. And experts are divided about whether it will continue to rise or crash. Few dollars. At the time, they were worth a few dollars each. He stored them in an IronKey digital wallet on a hard drive.

And he wrote the password on a piece of paper he has lost. Own bank. Perhaps unsurprisingly, the dilemma has put him off cryptocurrencies. Locked out. The BBC is not responsible for the content of external sites.Bitcoin owners are getting rich because the cryptocurrency has soared.

Stefan Thomas, a programmer in San Francisco, owns 7, Bitcoin that he cannot retrieve because he lost the password to his digital wallet.

By Nathaniel Popper. The password will let him unlock a small hard drive, known as an IronKey, which contains the private keys to a digital wallet that holds 7, Bitcoin.

stefan thomas bitcoin story

The problem is that Mr. Thomas years ago lost the paper where he wrote down the password for his IronKey, which gives users 10 guesses before it seizes up and encrypts its contents forever. He has since tried eight of his most commonly used password formulations — to no avail. Thomas said. Bitcoin, which has been on an extraordinary and volatile eight-month run, has made a lot of its holders very rich in a short timeeven as the coronavirus pandemic has ravaged the world economy.

They have been forced to watch, helpless, as the price has risen and fallen sharply, unable to cash in on their digital wealth. Of the existing Wallet Recovery Services, a business that helps find lost digital keys, said it had gotten 70 requests a day from people who wanted help recovering their riches, three times the number of a month ago.

Man Who Forgot Bitcoin Password Makes 'Peace' with $250 Million Loss: 'Time Heals All Wounds'

Bitcoin owners who are locked out of their wallets speak of endless days and nights of frustration as they have tried to get access to their fortunes. While those Bitcoin are now worth hundreds of millions of dollars, he lost his passwords many years ago and has put the hard drives containing them in vacuum-sealed bags, out of sight. With traditional bank accounts and online wallets, banks like Wells Fargo and other financial companies like PayPal can provide people the passwords to their accounts or reset lost passwords.

But Bitcoin has no company to provide or store passwords. This is made possible by the structure of Bitcoin, which is governed by a network of computers that agreed to follow software containing all the rules for the cryptocurrency. The software includes a complex algorithm that makes it possible to create an address, and associated private key, which is known only by the person who created the wallet.

The software also allows the Bitcoin network to confirm the accuracy of the password to allow transactions, without seeing or knowing the password itself. In short, the system makes it possible for anyone to create a Bitcoin wallet without having to register with a financial institution or go through any sort of identity check.

That has made Bitcoin popular with criminalswho can use the money without revealing their identity. It has also attracted people in countries like China and Venezuela, where authoritarian governments are known for raiding or shutting down traditional bank accounts. But the structure of this system did not account for just how bad people can be at remembering and securing their passwords.

Monica started the company in after helping a hedge fund regain access to one of its Bitcoin wallets. Thomas, the programmer, said he was drawn to Bitcoin partly because it was outside the control of a country or company. That year, he lost the digital keys to the wallet holding the Bitcoin. Thomas has soured on the idea that people should be their own bank and hold their own money. Other Bitcoin believers have also realized the difficulties of being their own bank.

Yet some of these services have had just as much trouble securing their keys. Many of the largest Bitcoin exchanges over the years — including the onetime well-known exchange Mt. Gox — have lost private keys or had them stolen.

SF man who can't remember Bitcoin password says he's 'made peace' with $220M loss

Abed said this did not dim his enthusiasm. Before Bitcoin, he said, he and his fellow islanders had not had access to affordable digital financial products like the credit cards and bank accounts that are easily available to Americans. In Barbados, even getting a PayPal account was almost impossible, he said.

The open nature of Bitcoin, he said, gave him full access to the digital financial world for the first time.