The Guy Who Lost More Than $300 Million in BITCOIN
Stephan Thomas owns about $302 million in bitcoin that he was paid many years ago, but he can’t access it since he forgot his password.
Stefan Thomas is the founder and CEO of micropayment streaming service Coil. He is a cryptocurrency specialist who formerly served as Ripple’s chief technical officer for five years. He was getting paid in cryptocurrency at a time when the majority of people had never heard of it.
He once accomplished some work for which he was compensated in Bitcoin. Thomas was paid 7,002 bitcoins. A single bitcoin was only worth a few dollars at the time. Thomas put all of his bitcoins into a digital wallet. Then he forgot his password.
How did Thomas forget his password?
Thomas stored his password in three distinct places. The first two are lost. His only hope is an encrypted flash device called an IronKey. Nobody can break into an IronKey. Kingston Technology, the company that manufactures the IronKey, cannot break into one. That’s how it’s made. It’s military-grade equipment that can withstand any malicious attack. You have just ten attempts to guess IronKey’s password. Then, the encryption key is immediately deleted, and the information is permanently gone.
On Amazon, you can buy an IronKey flash drive for $120. Thomas has attempted eight times to unlock the flash drive. After two more failed tries, the flash drive erases all data stored. Thomas’s digital wallet password (and his $302 Million) will be gone forever if this happens.
The New York Times quoted Stephan Thomas saying: “I tried everything. I would stay up all night trying different ideas for recovering it or just staring at the ceiling for hours.”
He gave another interview to KGO-TV After his story went viral. Thomas said it had been nine years since he discovered he was locked out of his account, so he’s had plenty of time to analyze it.
“There were a couple of weeks when I was desperate, and I don’t even know how to describe that feeling,” Thomas said, explaining how he felt at the beginning when he discovered he couldn’t remember his password in 2012. “You begin to doubt your self-worth.” “What type of person throws away something so important?”
But, he added, “time heals all wounds,” and he has “made peace” with his loss over the years.
“It was a pretty major turning point in my life where I recognized how I would define my self-worth moving forward.” He stated. “It wasn’t going to come down to how much money I had in my bank account.”
That’s all well and good, but losing more than $300 million? This can stress anyone.
Since the New York Times interview, hundreds of individuals worldwide have reached out to Thomas with advice and help, some serious and others funny.
“Someone recommended you try the phrase ‘password,’” he laughed. “Some individuals have suggested that I speak with various mediums, psychics, and prophets. Some folks recommend using nootropic memory enhancers.”
So far, he didn’t consider anyone’s advice.
Thomas, who now lives in San Francisco, is one of many bitcoin holders who have had their wallets locked. This has resulted in the inability to retrieve a huge number of Bitcoins worth more than $140 Billion.
In another recent case, a Welsh guy claims that in 2013, he tossed away a hard disk containing 7,500 bitcoin. He has offered his council $70 million to recover it from the city landfill.
As a result, it stands to reason that many Bitcoin assets acquired generally on the cheap a few years ago may be abandoned, lost, or forgotten today. Indeed, Bitcoin is significantly more advanced than carrying cash in your wallet since it is digital money that requires password security. Most of us would be concerned about having millions of dollars at our homes or carrying it around. And while bitcoin assets are stored on the internet, you are the only one who has access to them.
Stephan Thomas Still Has a Hope of Accessing His Fortune
Accessing the famous USB drive with ten attempts has become nearly impossible. However, there is a scientific technique to take a scanning electron microscope, go into the silicon chip, peel it away layer by layer, a few atoms thick, and then read out the actual memory cells.
And then, using that approach, you should be able to get around the 10-attempt restriction, and then you can have a supercomputer try billions of passwords each second.
The issue is that, primarily, this requires a specialist laboratory. It is expensive. And there are only a few people on the planet capable of doing so. Even so, it’s a high-risk situation. It might just fail, in which case the chip will be destroyed forever, and you never get a second chance.
It was not worth it back then. I believe it is now probably a good idea. However, it still needs a significant level of planning and logistics, and even then, it is not assured.
Now that this is all over the news, I’m having many people coming out to me, some of whom have access to this necessary equipment and expertise.
So I’m talking to them about whether we should try to recover and, if so, how much it would cost.
How To Protect Your Digital Assets and Avoid Thomas’s Mistake
The cryptocurrency business has responded to this concern by providing custodian services similar to those offered by banks. A company that wants to trade Bitcoin or another type of cryptocurrency may use a brokerage like Coinbase or Binance to store their digital assets. These third-party custodians offer services such as “hot” storage (online computers) and “cold” storage (offline computers).
And this is how they explain the procedure:
๏ Online Solutions: Because the usage of a network connection permits automatic access to the system, online solutions are capable of better speed and liquidity. However, because they are connected, they are more vulnerable to threats and attacks, which may result in the development of unauthorized transfers or the possible compromise of the signing keys. The only requirement for moving funds is in the possession of a signing key.
๏ Offline solutions: Because their key-storage systems can only be accessible at their physical locations, offline solutions are often slower to execute on customer requests. However, the architecture of this system considerably reduces the possibility of unauthorized transfers.
The great thing about third-party custody solutions is that forgetting your password isn’t the end. Coinbase offers a whole website dedicated to anyone needing a new password. So, if you want to acquire cryptocurrencies but aren’t good with passwords, I strongly advise you to let your broker hold the bitcoin for you.
Of course, the government does not regulate cryptocurrency assets, so if a brokerage is hacked or hijacked, you may be out of luck. The fact that bitcoin transactions are far more secure than cash or credit card purchases is part of the attraction. It’s encrypted, which makes it far more difficult to hack. However, it is not impossible.
When I think of “banks,” I imagine money stored in vaults. And “bank robbers” are masked men and women armed with weapons. But, like everything else, theft is going online. Cybercrime is expected to cost the world $10.5 trillion per year by 2025. Cryptocurrencies and the blockchain may help to minimize that number.
Since its beginning, cryptocurrency has been concerned about security. After all, that’s why Thomas and many other cryptocurrency holders lost access to their funds. They were blocked from accessing their assets due to security measures. As a result, there may one day be a more secure digital currency than the ones we have.
Overall, Today, we have the option of holding our cryptocurrencies if we want, and that is a right.
At the same time, and as a concern, most people are likely better to keep their digital assets with a custodian to reduce the risk of theft and loss. Even if you lose access to your assets, you can quickly regain them.